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Withdrawals from Binance, the world's largest crypto exchange, have surged as concerns over its proof-of-reserves report spook traders. The exchange has endured $902 million of net outflows (the difference between the value of assets arriving and leaving the exchange) in the last 24 hours, according to data from Nansen. Binance’s net outflow has surpassed those of all other centralized exchanges’ and is almost nine times larger than the second-largest outflow. It is also the highest outflow for the exchange since Nov. 13, which was two days after rival exchange FTX filed for bankruptcy protection. The withdrawals come as traders look to an announcement from the Federal Reserve on Wednesday about interest rates. The Fed is widely expected to raise its benchmark rate by 0.5 percentage point.

Following the outflows, Binance CEO Changpeng Zhao warned his staff to expect turbulent times ahead. Amid concerns about the exchange’s financial health, he wrote in an internal memo, "While we expect the next several months to be bumpy, we will get past this challenging period – and we'll be stronger for having been through it."

FTX founder and former CEO Sam Bankman-Fried will be remanded into custody after a Bahamas judge ruled Bankman-Friedshould be denied bail. Bankman-Fried's attorneys initially asked the judge to consider that he be released on $250,000 bail, arguing he needed to be able to regularly take medication, including Zyrtec, an over-the-counter allergy medication, and keep to his vegan diet. Prosecutors in the Bahamas argued that granting Bankman-Fried bail would go against a treaty with the U.S. that requires defendants to be held in custody pending extradition proceedings. Bankman-Fried told the judge he wouldn’t waive his right to fight the extradition effort, suggesting he may seek to remain in the Bahamas.

Chart of the Day

• The chart shows the total number of stablecoins held in centralized exchange wallets has dropped by nearly 12% to a six-month low of 38.61 billion in one month.
• The balance has declined by 8% this week alone.
• Investors have been taking direct custody of their coins since FTX filed for bankruptcy last month. The trend has accelerated this week, with Binance facing "extra scrutinies and tough questions" in the wake of FTX's collapse.
• Glassnode includes BUSD, GUSD, HSUD, DAI, USDP, EURS, SAI, sUSD, USDT and USDC while calculating the total stablecoin balance held on exchanges.

– Omkar Godbole

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