Binance, a prominent cryptocurrency exchange, has experienced a noticeable decrease in users’ crypto assets due to regulatory challenges it faced in various jurisdictions in June.
According to the exchange’s most recent proof of reserve snapshot taken on July 1, users’ Bitcoin deposits decreased by 3.5%, from 614,800 BTC recorded on June 1 to 592,450 BTC. This indicates that approximately 22,000 BTC was withdrawn from the platform during that period. Data from Glassnode, a data aggregator, supports this trend, revealing a significant decline in Binance’s BTC exchange balance. The balance dropped from a peak of 709,001 BTC on June 4 to as low as 651,275 BTC on June 23, before slightly recovering to its current balance of 657,536 BTC as of July 6.
Binance users’ Ethereum deposits declined by 4.4% to 4.16 million ETH as of July 1, compared to the 4.35 million ETH held on June 1. This means that users withdrew nearly 200,000 ETH from the platform within a month. Glassnode data indicates that Binance’s ETH balance has been consistently decreasing since the beginning of May, coinciding with a period when the total amount of ETH held across all exchanges reached a five-year low.
Another crypto asset that experienced a decline in deposits over the past month is Tether’s USDT. The stablecoin balance on Binance decreased by 1.61 billion, amounting to 15.47 billion USDT, representing a 9.45% decrease. However, Binance’s BNB balance showed an opposite trend, increasing by 6.6% to 29.7 million BNB as of July 1. Other assets, such as Ripple’s XRP and USD Coin (USDC), also recorded increased deposits.
During June, Binance encountered significant regulatory hurdles in various jurisdictions. The United States, several European nations, and Nigeria heightened their scrutiny of the exchange’s activities. The U.S. Securities and Exchange Commission (SEC) accused Binance of violating federal securities law and offering crypto securities tokens to American citizens. Although Binance has pledged to contest these allegations, CEO Changpeng ‘CZ’ Zhao perceives the lawsuit as more than just a corporate legal battle, viewing it as an attack on the broader cryptocurrency industry.
As a result of these regulatory challenges, Binance lost its Euro payment partner in Europe and decided to exit several regional markets, including Austria, the Netherlands, Cyprus, and Germany. Furthermore, French authorities raided Binance’s office in France, and a cease and desist order was issued against the exchange in Belgium. Despite these issues, a Binance spokesperson informed CryptoSlate that the firm’s primary focus is to ensure compliance with Europe’s forthcoming Markets in Crypto Assets (MiCA) regulations.