By Shelly Melancon (Switzerland)
Global leading cryptocurrency exchange, Binance may still be in murky waters as a slew of hedge funds are considering leaving the exchange. This move is informed by the regulatory pressure Binance has been facing since the past few weeks. If the hedge funds go ahead with their plans, they’ll join the list of partners that have already deserted the exchange.
Institutional investors like Tyr Capital and ARK36 have reduced their positions on Binance, while citing the scrutiny the crypto exchange has been subjected to by regulatory bodies around the globe. Ed Hindi, co-founder of Tyr Capital claimed the move was necessary in order to protect investors from ‘unknown unknowns’ as Binance tries to wriggle itself out of regulatory booby traps.
Binance’s Woes Continue to Pile Up
Binance has come under heavy regulatory surveillance since June, leading to speculations about the fate of the exchange. It seems recent events are an indication of what may eventually befall Binance. After a regulatory showdown with UK authorities, forcing it to quit operations in the country, it lost some of its customers to rival exchanges such Kraken, Bitmax.
Some days after, Binance suspended deposits from Single Euro Payments Area (SEPA) and Faster Payments Service (FPS). More woes were to come as two major UK banks, namely Barclays and Santander discontinued deposits and withdrawals to and from the exchange, followed by a sudden service withdrawal from Clear Junction, another payment service provider.
Also read:Binance regulatory travails continued in other countries, including Canada, Thailand, South Korea, Malta, as well as Cayman Islands where it is based. It also faced a class action from a group of Futures traders in Italy, who claimed Binance was responsible for losses incurred back in February after they were unable to access their opened positions. The compensation the exchange offered was nothing compared to the losses incurred during the brief downtime, according to affected parties.
Binance Assures Users and Regulators of Compliance
On its part, Binance has assured users that trading services are still in operation despite the regulatory buzz. In one of his tweets, CEO of the exchange, Chanpang Zhao (CZ) stated that compliance is a journey and that the exchange remained committed to cooperating with regulators and finding a common ground on regulations. This assurance may not prevent the horde of users and partners already leaving the exchange.
Meanwhile, Binance celebrated its 4th anniversary last week around the globe. The exchange has been able to build a name for itself, position itself as a platform to reckon with by user base and daily trading volume. In fact, it is arguably the foremost crypto platform in the world, providing a wide range of trading options and investment products. Certainly, if Binance does not address the challenges on regulations, it may lose its large user base to other exchanges.
Interestingly, it launched an NFT marketplace (custodial and non-custodial) in June to provide content creators and artists (traditional and digital) with a platform to display their contents. Binance Smart Chain, its native network has also become a host to many projects in the crypto space.
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