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Binance in Turmoil – Unprecedented Fund Withdrawals

Thu 19 Oct 2023 ▪ 3 min of reading ▪ by Fenelon L.
Event

Binance, the leading cryptocurrency exchange platform, is currently facing massive capital outflows. These movements appear to be motivated by growing concerns about regulation.

Massive withdrawal at Binance

Massive withdrawals from Binance despite a rising market

The numbers speak for themselves. In October, Binance users have already withdrawn over $500 million, following withdrawals of $840 million in September.

Interestingly, this massive outflow occurs in a context of a general increase in cryptocurrency prices and positive expectations surrounding Bitcoin exchange-traded funds (ETFs) in the United States.

Speaking to DL News, several traders cited growing concerns about regulatory risks as the main reason for these fund movements.

DefiLlama’s statistics illustrate this trend, showing a $525 million withdrawal from Binance in October, adding to the significant outflows in previous months, including nearly $4 billion withdrawn in June.

Regulatory problems causing concerns

Binance’s regulatory troubles seem to be at the heart of these outflows. Following the collapse of the FTX crypto exchange, U.S. regulators, including the Securities and Exchange Commission (SEC), have stepped up their scrutiny. The SEC has explicitly accused Binance of violating several federal laws, including “illegal solicitation of U.S. investors.”

Binance is currently in regulatory conflict with U.S. authorities. To bolster its defense, the platform has surrounded itself with former officials from various U.S. government agencies. The burning question is: Will Binance and its CEO, Changpeng “CZ” Zhao, face criminal charges in the United States?

Although the Department of Justice has not yet brought formal charges, some experts and media suggest a possible legal proceeding.

The future of Binance in the United States is uncertain, despite its status as a leader in the crypto ecosystem. Users, despite a bullish market, seem to favor caution in the face of increasingly strict regulation. Only time will tell if Binance can overcome these persistent regulatory hurdles.

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Fenelon L. avatar
Fenelon L.

Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.