Massive Withdrawals on Binance Despite a Rising Market
The numbers speak for themselves. This October, Binance users have already withdrawn more than $500 million, following withdrawals of $840 million in September.
Curiously, this massive leak comes against a backdrop of a general rise in crypto prices and positive anticipations around Bitcoin exchange-traded funds (ETFs) in the United States.
Addressing DL Newsseveral traders cited growing concern about regulatory risks, seeing them as the main reason for these fund movements.
Statistics from DefiLlama illustrate this trend well, showing a withdrawal of $525 million from Binance in October, adding to large outflows in previous months, including nearly $4 billion withdrawn in June.
Regulatory issues that worry
Binance’s regulatory woes appear to be at the heart of these exits. Following the collapse of crypto exchange FTX, US regulators, including the Securities and Exchange Commission (SEC), have stepped up their monitoring. The SEC has clearly accused Binance of violating several federal laws, including “illegal solicitation of American investors”.
Binance is currently in a regulatory dispute with the American authorities. To strengthen its defense, the platform has surrounded itself with former officials from various American government agencies. The question on everyone’s lips is: Will Binance and its CEO, Changpeng “CZ” Zhao, face criminal charges in the United States?
Although the Justice Department has not yet filed formal charges, some experts and media outlets are suggesting possible legal action.
Binance’s future in the United States is uncertain, despite its leading status in the crypto ecosystem. Users, despite a bull market, seem to favor caution in the face of increasingly strict regulation. Only time will tell whether Binance will succeed in overcoming these lingering regulatory hurdles.
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