Users Pull Half A Billion Dollars From Binance In October
While the outflows represent only 1% of total assets under Binance's control, it's part of a bigger set of problems the exchange is facing.
Approaching $600 million has fled Binance in the last month, including over $100 million in the last 24 hours, according to industry site DeFiLlama. So far in October, traders have withdrawn $567 million. One day, October 5, saw $268 million dollars pulled from the platform.
This will be of no acute concern to Binance, which has almost $58 billion under management, including $50 billion of customer assets, meaning the monthly outflow is just 1% of the total. However, it's part of a wider picture that suggests Binance's future may not be as charmed as its part.
The withdrawals come at a time of increasing optimism and prices for bitcoin, as hopes renew for an ETF and the bear market move further into the rear view. Overall, Binance's holdings have decreased by $10 billion over the past year, despite the total crypto market cap rising by over 15% in that time.
Regulatory concerns are likely part of the problem, with a slew of lawsuits from the SEC, CFTC, and potentially DOJ being initiated against Binance and its founder, CZ. The range of charges so far is broad, including operating as an unregistered securities exchange, misleading investors, mishandling customer funds, and manipulating markets.
Binance has denied the charges, and gone on a hiring spree, tapping government agencies including the US Treasury Department and IRS for former employees to beef up its compliance and legal departments.
Still, with the might of the US government tilting against it, and particularly with the possibility of criminal charges hanging over CZ (very different from the legal problems Coinbase is facing, for example), users are likely feeling that there are safer ways to trade crypto, and better places to store their coins.
Friends In The Crypto World
It's not all bad for Binance though. While US government agencies are lining up to take a shot at the organization, others in the crypto space have got their back.
Circle, the issuer behind USDC, which has had its own problems with regulators, recently filed an amicus brief to the court, arguing that dollar-pegged crypto assets are not securities. Amicus briefs allow third parties who are not directly involved in a case to offer evidence and arguments to help the court reach a fair decision.
There has been much speculation about Binance Coin (BNB), which has retested support around $200 many times in the last several months. A break lower could mean a 75% crash, since there is little to no support before around $60—potentially signaling serious trouble for the exchange.
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