Investor concerns have reportedly contributed to Binance’s crypto token dropping 6% in the last day.
BNB, which is Binance’s native token, has also fallen 15% over the last week and hit its lowest level since July, CNBC reported Monday (Dec. 9).
The drop has been driven in part by the crypto exchange’s past ties to FTX and worries that creditors of that now-bankrupt exchange could claw back money that is determined to have been part of fraudulent conveyances from FTX to other companies or outside investors, according to the report.
Binance was an early investor in FTX before exiting that equity position last year in exchange for $2.1 billion, the report said.
Investors are concerned about Binance’s ability to handle those claims from the bankruptcy proceedings, are skeptical about comments from executives of any crypto-related firm and have seen a large amount of net withdrawals from the Binance exchange, per the report.
Binance did not immediately reply to PYMNTS’ request for comment.
As PYMNTS reported Friday (Dec. 16), efforts to restore public trust in the Binance crypto exchange are proving to be challenging.
Last week was not an easy one for the embattled exchange as it has seen billions of dollars of customer outflows and was impacted by Friday’s news that Mazars, the firm hired by Binance to report on its finances, is ceasing all future crypto accounting operations as a result of the public pushback and criticism it received about its recent work.
Plus, during a Wednesday (Dec. 14) Senate Banking Committee hearing, both Shark Tank investor Kevin O’Leary and Sen. Elizabeth Warren questioned the legitimacy of the privately run crypto exchange.
However, Binance CEO Changpeng Zhao said in a Tuesday (Dec. 13) memo to Binance staff that the cryptocurrency exchange will ride out the current crypto winter.
In the memo, which was provided to PYMNTS, Zhao said he expects the next several months to be “bumpy” but that the exchange will emerge stronger.
“The fallout from the FTX explosion has brought with it a lot of extra scrutiny and tough questions,” Zhao wrote in the memo. “The good news is that, even though the news stories don’t always reflect it, we can answer the tough questions thrown at our business.”
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