Following the global regulatory crackdown on Binance, the trust of exchange’s customers has been dwindling. Recent reports reveal that the month of June alone saw a significant decline in users’ crypto assets.
According to the latest snapshots of Binance’s proof of reserves taken on 1st of July, users’ Bitcoin deposits has fallen by over 3.5% in June solely. Data suggests that the figures have dropped to 592,450 Bitcoins from 614,800 recorded on June 1. This implies that the exchange users withdrew around 22,000 Bitcoin from the platform during the period.
Additionally, data from Glassnode, an on-chain analytics firm, confirms that Binance’s Bitcoin balance on exchange has significantly decreased. According to the data aggregator, the exchange balance declined from a peak of 709,001 BTC on June 4 to as low as 651,275 BTC on June 23 before rising to its current balance of 657,536 BTC as of July 6.
Simultaneously, the exchange users’ Ethereum deposits have also taken a hit hinting the waning trust in the exchange and not the assets. Reportedly, the Ethereum deposits have declined by 4.4% to 4.16 million ETH as of July 1 from the 4.35 million ETH held for users on June 1. This means the exchange users withdrew nearly 200,000 ETH from the platform over 30 days.
Meanwhile, Glassnode data shows that Binance’s ETH balance has been on a downward trend since the beginning of May. Notably, the declining balance here coincides with a period when the total number of ETH held across all exchanges fell to a five-year low.
It is worth nothing that another major crypto asset that saw its deposits fall over the past month is Tether’s USDT. Reportedly, the stablecoin balance on Binance declined by 1.61 billion to 15.47 billion, representing a 9.45% decrease.
The month of June came up with intensive struggles for Binance given the global regulatory crackdown on the exchange. Starting with the US Securities and Exchange Commission (SEC), the series of lawsuits and investigations spread to Europe and now even Australia.
On June 5th, the SEC filed a lawsuit against the exchange claiming it of selling unregistered securities, operating illegally and commingling users’ funds. Following this, the SEC filed an emergency motion in the court to put a restraining order to the exchange’s assets. While the motion didn’t pass through citing the jeopardy to users’ funds, the act triggered the investors and ended in huge outflows. As reported by Todayq News, the outflows during the period was significantly larger than that of Coinbase, another exchange hit by the lawsuit.
Additionally, the delisting of trading pairs and halting of USD services triggered the investors to run for their funds. As the regulatory wave spread to other jurisdictions, troubles kept on increasing.
Reportedly, the exchange lost its Euro payment partner in Europe and exited several regional markets, including Austria, the Netherlands, Cyprus, and Germany. The exchange also failed to obtain a Virtual Asset Service Provider (VASP) in Austria as well as Netherlands where it also subject to a $3 million fine.
Simultaneously, French authorities are investigating Binance for operating illegally and aggravated money-laundering activities whereas the Belgian regulators have passed a cease and desist order.
Sharing concerns with the US SEC, Brazilian authorities have also raised speculation over Binance and are considering sincere investigation. Amidst all this, the derivatives arm of the exchange is under the probe of ASIC in Australia after it decided to stop AUD bank transfers.
However, Binance has pledged to contest these allegations. Nonetheless, while CEO Changpeng Zhao has characterized the lawsuit as more than a corporate legal battle, he sees it as an atton the broader crypto industry several instances including the leaked chats cast a serious question into the exchange’s image.