Binance has seen crypto inflows surge since its historic fine
By Sidhartha Shukla
(Bloomberg) — Crypto traders are again flocking to Binance, the giant digital-asset exchange which two months ago paid a multibillion-dollar US penalty over illegal activities and parted ways with founder and Chief Executive Officer Changpeng “CZ” Zhao.
Binance has recorded net inflows of $4.6 billion since its Nov. 21 agreement with US agencies, where it pleaded guilty to crimes including money laundering and sanctions evasion, according to data from DefiLlama. That far outpaced what some of its biggest rivals, including OKX and Bybit, took in.
The platform has attracted $3.5 billion so far in January, more than for any full month since at least November 2022.
The inflows are a boon for Richard Teng, who took over as CEO after the settlement, and follow a dismal year for Binance marked by market-share erosion and outflows. Binance’s share of all spot crypto trading stabilized in December after nine straight months of declines and its exchange token, Binance Coin, has advanced 30% since Nov. 21, outperforming broader markets.
To a large extent, Binance has benefited from a cryptocurrency recovery that buoyed rival platforms as well. Bitcoin rallied almost 160% last year, and the sector received much-anticipated validation this month when the US Securities and Exchange Commission approved the first exchange-traded funds investing directly in the biggest token.
Traders moved funds onto Binance even as Teng confronts a host of challenges. He must establish a global headquarters, name a board and appoint an independent monitor for three years. Binance also lacks full licenses in major crypto hubs like Singapore, Dubai and Hong Kong. And it is still contending with a lawsuit from the SEC.
The perils of catering to local markets without an official seal of approval became apparent in the past month, when Indian authorities shut down access to Binance and several other offshore exchanges by blocking their websites and ordering their apps taken off Apple Inc.’s and Google’s stores there. Last year, countries from Australia to Belgium cracked down on Binance for operating without the requisite permits.
—With assistance from Emily Nicolle and Suvashree Ghosh.
©2024 Bloomberg L.P.
