Binance Loses 2.1 Billions in Outflows Amid Mounting Problems
Traders have withdrawn billions of dollars from Binance as the world’s largest cryptocurrency exchange faces mounting legal and technical problems.
CFTC Sues Binance
On Monday, the Commodity Futures Trading Commission (CFTC) sued Binance for allegedly operating illegally in the US and violating rules aimed at preventing financial crimes.
Binance Reinstates Trading Fees
Binance recently reinstated trading fees on spot bitcoin trading after previously cutting them to zero. It also had to temporarily halt spot trading for several hours to fix a software issue.
$2.1 Billion in Net Outflows
According to Nansen, Binance had net outflows of $2.1 billion on the Ethereum blockchain over seven days as of Monday evening. Despite this, Binance still holds $63.2 billion in the exchange’s publicly disclosed wallets.
Regulatory Pressure and Declining Market Share
Binance has faced regulatory pressure before, resulting in larger outflows. Its spot market share declined to 30% on March 24 from 57% at the beginning of the month, mainly due to the reintroduction of trading fees. Binance’s market share for cryptocurrency derivatives remained steady at 66% as of March 24, according to CryptoCompare.
Federal Judge Blocks Binance.US
A federal judge recently blocked Binance.US from buying Voyager Digital’s customer accounts out of bankruptcy while federal authorities challenge the deal.
Expectations of More Regulatory Actions
Investors and analysts are anticipating more regulatory actions against Binance in the US and potentially other jurisdictions. Binance’s chief strategy officer recently told The Wall Street Journal that the company expects to pay monetary penalties to settle existing US regulatory and law enforcement investigations.
Fraudulent Activity Allegations
The CFTC chairman accused Binance of “ongoing fraud” and intentionally evading registration requirements. While Binance has said it’s made efforts to operate legally in the US, some investors have still pulled back from the exchange.
Conclusion
As problems continue to mount for Binance, the exchange has lost billions in outflows and faced legal and technical difficulties. With regulatory pressure increasing, investors and analysts are keeping a close eye on the exchange for potential further actions.
