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FTX collapse triggers 250k Bitcoin wipeout in Futures Open Interest

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Amid Withdrawals, Binance CEO Warns Of Bumpy Months Ahead

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Amid Withdrawals, Binance CEO Warns Of Bumpy Months Ahead

Binance founder Changpeng Zhao (CZ) has reportedly told staff to expect some difficult months as the leading cryptocurrency exchange is seeing customer withdrawals. The warning comes while the crypto industry is facing challenges after high-profile bankruptcies and amid tightening regulations.

$3 Billion Pulled Out From Binance at Peak, Nansen Data Shows

Binance, the world’s largest crypto exchange by trading volume, saw net outflows reaching $3 billion on Tuesday, Nov. 13, blockchain analytics firm Nansen revealed. The news comes as Changpeng Zhao, founder and chief executive of Binance, sought to assure his team that the company is strong enough financially to survive the crypto winter.

Binance Netflow 7D ($) -3,660,311,347

8,783,380,428 – Outflow
5,123,069,081 – Inflow

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Exchange Flows dashboard ⤵️https://t.co/CYrBQLryQ0 pic.twitter.com/vV6vcqoWKK

— Nansen 🧭 (@nansen_ai) December 13, 2022

The coin trading platform has been dealing with the effects of a string of negative events in the sector, including the collapse of FTX, a major competitor in the exchange market which filed for bankruptcy protection in November. FTX founder Sam Bankman-Fried was arrested in the Bahamas on charges filed against him in the United States.

A report by Reuters about an investigation by the U.S. Department of Justice into Binance was also a factor in investors’ nervousness, according to Andrew Thurman, content lead for Nansen, who commented on the outflow for CNN. Headlines that prosecutors are considering a money laundering probe also came against a backdrop of speculation about Binance’s reserves.

Binance currently holds $60.4B in their publicly disclosed addresses

$15.5B $BUSD
$12.3B $USDT
$9B $BTC
$6.2B $BNB
$6.1B $ETH
And others pic.twitter.com/sgr6RTIRYx

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— Nansen 🧭 (@nansen_ai) December 14, 2022

CZ Acknowledges Withdrawals, Seeks to Downplay Outflow and Calm Down Colleagues

In a tweet posted on Tuesday, Changpeng Zhao acknowledged the outflow of funds while insisting that Binance has been in similar situations before. “Some days we have net withdrawals; some days we have net deposits. Business as usual for us,” he said, suggesting “it is a good idea to ‘stress test withdrawals’ on each CEX on a rotating basis.”

Meanwhile, the crypto executive also sought to alleviate concerns about the exchange’s health in a memo addressed to its staff. According to a report by Bloomberg quoting the document, Zhao emphasized that the industry is going through “a historic moment” in which Binance is in a strong financial position and “will survive any crypto winter.”

“While we expect the next several months to be bumpy, we will get past this challenging period – and we’ll be stronger for having been through it,” CZ told the Binance team. Referring to the latest developments in the space, he added that the recent collapse of FTX has led to “a lot of extra scrutiny and tough questions” for his exchange.

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Arrest, Bankruptcy, Binance, ceo, Changpeng Zhao, collapse, Crypto, crypto assets, crypto exchange, crypto trading, Crypto Winter, Cryptocurrencies, Cryptocurrency, CZ, Exchange, Exchanges, founder, ftx, Investors, Memo, Nansen, Reports, Sam Bankman-Fried, sbf, Withdrawals

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What do you think future holds for Binance and other major cryptocurrency exchanges? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Research Shows Centralized Exchanges Saw The Most Visits This Year From Americans, Koreans, Russians

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Research Shows Centralized Exchanges Saw The Most Visits This Year From Americans, Koreans, Russians

Residents of the United States, South Korea and the Russian Federation have been the most frequent users of centralized exchanges this year, according to a new study. The finding comes after the spectacular crash of FTX, one of the largest such platforms, amid tightening regulations and fewer new users.

U.S. Leads by Number of CEX Users, Turkey and Japan Are Also in the Top in Terms of Traffic

The U.S., South Korea and Russia together account for 22% of all visits to centralized exchanges (CEX) for cryptocurrencies, according to the 2022-2023 “Global Crypto Industry Overview and Trends” annual report produced by Huobi Research. The estimate is based on data from the top 100 CEXs on active users, trading depth, trading volume, and reliability.

With a share exceeding 9%, the United States is the pronounced leader in terms of absolute number of crypto users generating CEX traffic. South Korea, Russia, Turkey, and Japan are next with 7.4%, 6.1%, 5.6% and 3.8%, respectively.

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The drivers are different in each case – from high unemployment and housing prices turning young people in South Korea and Japan towards crypto investments, to Western sanctions for Russians and hyperinflation for Turks.

The authors insist that “centralized exchanges are vital in the cryptocurrency market. These exchanges are usually user friendly and many crypto novices start with them.” They also point out that most of the users and liquidity in the crypto market are aggregated in centralized exchanges.

However, the findings come in the aftermath of the crash of FTX, one of the largest CEXs which filed for bankruptcy protection on Nov. 11 amid liquidity issues. The researchers call it “the incident of the year since entering the current bear market” and note it is part of a series, also including the collapse of Terra and the bankruptcy of 3AC.

The study further reveals that the overall market size of CEXs declined more significantly in 2022 in comparison with the previous year. The number of unique visitors decreased by 24%. “The continuous gloomy market condition and the depreciating assets are both depressing existing users,” the report elaborates. At the same time, new user growth declined to 25 million from 194 million in 2021.

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Regulations for Centralized Exchanges Tighten in Key Jurisdictions Around the World

Huobi Research also notes that regulations on centralized cryptocurrency exchanges are tightening globally after the FTX bankruptcy, including for on-chain activities, and that regulators may oblige CEXs to publicize proof of funds or require that they maintain an amount of funds in reserve.

This year, U.S. president Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets, the EU approved its Markets in Crypto Assets (MiCA) legislation, Russia has been working to expand its legal framework for crypto, and South Korea passed eight related regulations.

Against this backdrop, decentralized finance (defi) has become one of the crypto markets with skyrocketing growth, the author’s highlight. Despite a series of unfavorable incidents in that sector as well, the more experienced defi users remain confident about the recovery and the long-term value of defi.

With almost 32% of the traffic, the U.S. also has the largest share in this segment. Brasil is second, with a little over 5%, followed by several developed countries, unlike the CEX market, namely the U.K., France, Canada, and Germany, which are seeing significant defi traffic.

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Bankruptcy, Centralized Exchange, Centralized Exchanges, CEX, collapse, Crypto, crypto exchange, Cryptocurrencies, Cryptocurrency, Exchange, Exchanges, ftx, Huobi Research, Regulations, report, Research, study, traffic, users

Do you think centralized exchanges will continue to play a key role as entry points to the crypto space for novice users? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Creativan / Shutterstock.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Bankruptcy

Crypto Exchange Bitfront Shuts Down Amid Industry Challenges

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Crypto Exchange Bitfront Shuts Down Amid Industry Challenges

Cryptocurrency exchange Bitfront has announced its intention to cease operations in the coming months, citing challenges facing the industry. The U.S. trading platform, backed by Japan’s social media giant Line, indicated the decision is unrelated to the collapse of FTX.

Line-Supported Digital Asset Exchange Bitfront Suspends New Sign-ups

Bitfront, a crypto exchange operating in the United States, has suspended new sign-ups and credit card payments while planning to cease operations in a few months’ time. The move comes despite efforts to overcome the current challenges in the “rapidly evolving” crypto industry, the company announced, quoted by Reuters and Bloomberg.

In the statement published on its website, the exchange explained it has “regretfully determined that we need to shut down Bitfront in order to continue growing the Line blockchain ecosystem and Link token economy.” The U.S.-based platform, which launched in 2020, is backed by the Japanese social media firm Line Corp.

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Bitfront also pointed out that the decision to close down is not related to the problems of “certain exchanges that have been accused of misconduct,” an indirect reference to FTX, one of the largest global players in the market before it collapsed and filed for bankruptcy protection on Nov. 11 amid liquidity issues.

Other companies in the space, like Blockfi for example, have been hurt by exposure to FTX. The crypto lender announced on Monday it has petitioned for Chapter 11 bankruptcy protection along with eight of its affiliates. When Blockfi paused withdrawals earlier this month, it specifically cited the “lack of clarity” regarding the state of FTX at the time.

With a 24-hour volume of less than $94 million, only a dozen trading pairs and six coins, according to Coingecko, Bitfront has a small share of a market with a total trading volume of almost $57 billion over the same period, the Bloomberg report noted.

The exchange informed users that new sign-ups and card payments have been suspended on Nov. 28 while deposits in cryptocurrency and U.S. dollars will be halted on Dec. 30. It also urged customers to withdraw all their assets by March 31, 2023, when all withdrawals will be suspended as well.

Tags in this story

Bankruptcy, Bitfront, Challenges, collapse, Crypto, crypto exchange, Cryptocurrencies, Cryptocurrency, Exchange, ftx, Issues, Japan, Line, operations, Services, shutdown, Social Media, suspension, U.S.

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Do you expect other crypto trading platforms to go out of business? Let us know in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

Advertisement

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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