Binance Crackdown: Here’s Proof Coinbase is the Biggest Winner
It looks like cryptocurrency exchange Coinbase is gaining more prominence in the last few days as some on-chain data have highlighted the growing inflow into the exchange’s reserve at the detriment of Binance.
Huge Coinbase Inflows Spotted
On-chain data compiled by CryptoQuant showed that Coinbase’s reserve increased by up to 12,000 Bitcoin (BTC), just around the same period that Binance’s reserve plunged by 5,000 BTC. Bradley Park, a Web3.0 analyst at CryptoQuant pointed out that the decrease in Bitcoin reserves on Binance appears to be due to retail outflows.
In the first 12 hours preceding the legal enforcement, Nansen confirmed on the X app that there was no real sign of a “mass exodus of funds.”
“In the past, Binance has processed higher volumes of outflow and negative netflow: June 2023 after the SEC sued Binance, December 2022 after insolvency rumors, and the immediate aftermath of FTX,” Nansen outlined.
This status quo was soon tilted as Binance began to record significant outflows from its reserve. In the space of 24 hours, the digital asset service provider had seen outflows up to the tune of $2.2 billion. The magnitude of the withdrawal suggested that retail investors were pulling their funds from the exchange.
The matter of interest is the fact that as these funds are leaving Binance, they are finding their way to Coinbase. Head of research at Hong Kong-based digital-asset platform VDX Greta Yuan believes that the market is still very nervous about the enforcement action against Binance. Drawing on the current situation, the analyst noted that compared to Binance, “Coinbase has stood the test of time.”
Binance Sojourn in US Ended
The United States Department of Justice (DOJ) brought an enforcement action against Binance earlier this week, claiming the exchange engaged in acts of conspiracy, operating an unlicensed money-transmitting business, flouting Know-Your-Customers and anti-money laundering rules, and infringing the International Emergency Economic Powers Act.
Notably, the U.S. agency demanded a $4.3 billion settlement from the exchange and the news seems to have shaken the broader crypto market. Binance Founder Changpeng ‘CZ’ Zhao immediately pleaded guilty to the money laundering charge and stepped down from his position as CEO of the leading cryptocurrency exchange by market capitalization.
As part of the penance the exchange was made to pay, it had to close shop in the US, ending its sojourn in the country, a move that is a win for Coinbase.
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Filed under: News - @ November 24, 2023 3:23 pm