Binance’s native BNB token plunges to lowest since July as concerns mount about withdrawals, FTX ties

More than a month after the collapse of FTX, investors’ concern about the crypto exchange Binance is not fading.

on Binance native token, BNB, has fallen 15% in the past week, including a drop of over 6% in the last 24 hours. BNB, first mined in 2017, is the fifth most valuable cryptocurrency in the world, with a market capitalization of about $39 billion, according to CoinMarketCap. It’s just in the back bitcoin, ethereumtether and USD Coin.

The latest issue hanging over Binance is FTX’s bankruptcy proceedings. Binance was the first outside investor in FTX. In exiting its equity position in the company last year, Binance received a payment equal to approximately $2.1 billion.

In an interview on CNBC’s “Squawk Box” on Thursday, Binance CEO Changpeng Zhao dismissed concerns that his company could recoup that money as FTX works its way through bankruptcy court and receivers seek to recover all fraudulent transfers. made by FTX to outside businesses or investors.

“Financially, we’re fine,” Zhao said after being asked by CNBC’s Becky Quick if the company could handle a $2.1 billion demand.

Crypto investors have become skeptical of senior executives’ comments about the financial health of their companies. FTX founder and former CEO Sam Bankman-Fried said on Twitter that his company’s assets were doing well, even though executives knew it was in the midst of a liquidity crisis that eventually forced the exchange into bankruptcy. Bankman-Fried was arrested this week in the Bahamas and charged by US prosecutors with fraud and money laundering.

Withdrawal requests are another area of ​​concern. Zhao said about $1.14 billion in net withdrawals were processed on Tuesday, but tweeted that it was “not the highest withdrawal we’ve processed, not even the highest [five].” On Wednesday, he said the situation had “stabilized.” Blockchain analytics firm Nansen said the number of withdrawals on Tuesday reached as much as $3 billion.

A Binance spokesperson told CNBC in a statement that “we passed this extreme stress test because we operate a very simple business model – we hold assets in custody and generate revenue from transaction fees.” The spokesperson did not immediately respond to a question about the decline of the BNB.

Binance and FTX were closely related. Zhao publicly announced last month that his company was liquidating its position in FTT, FTX’s native coin, amid concerns about the solvency of both FTX and its trading subsidiary Alameda Research.

FTX then faced an immediate spike in withdrawal requests and Binance stepped in with a non-binding agreement to acquire the company as part of a rescue plan. A day later, Binance backed out of the deal, saying “FTX’s issues are beyond our control or ability to help.”

Like all major crypto projects and companies, Binance has developed its own currency. On its website, the company says people can “use BNB to pay for goods and services, settle transaction fees on the Binance Smart Chain, participate in exclusive token sales, and more.” Areas where BNB can be used, according to the site, include payment, travel and entertainment.

There is a circulating supply of about 160 million BNB out of a total maximum supply of 200 million, according to CoinMarketCap. Bloomberg reported in June that the SEC was investigating whether the 2017 token sale constituted a security offering that should have been registered with regulators.

— CNBC’s Mackenzie Sigalos contributed to this report.

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