Is Binance’s Future in Jeopardy? Bank Run Unlikely, Says Analyst

As worries swirl around Binance, it’s worth delving into the perspective of CryptoQuant’s Julio Moreno regarding the potential occurrence of a “bank run” within the exchange. Moreno’s data-driven analysis sheds light on the concerns of a sudden surge in withdrawals from Binance, a situation similar to a bank run.

Julio’s Observations

Julio looked at two main things from historical data. Firstly, Binance’s Bitcoin reserves, the amount of Bitcoin they have, have stayed mostly in line with their usual patterns.

This suggests that there might not be a big problem with people rushing to withdraw. Secondly, these reserves have not dropped by more than 16% from their highest point since 2018. Moreno says this number is important and that people who watch the market should pay attention to it. 

What Went So Wrong? 

Binance is facing many problems. They’re getting sued and watched closely by governments worldwide. The SEC says they broke finance laws, Brazil thinks one of their executives ran a pyramid scheme, and France is looking into possible money laundering. Recently even Mastercard has ended its operation with the firm fearing regulatory scrutiny. 

Another Domino to Fall?

Interestingly, Moreno compares Binance to FTX, the crypto platform created by Sam Bankman-Fried. According to him, FTX’s reserves did not recover after a significant decline in 2021, while Binance’s reserves have shown resilience and consistency.

Next up on the list are allegations that its CEO, Changpeng Zhao, is selling off Bitcoin holdings to support the exchange’s native token, BNB, and maintain its value around $200. These claims have raised concerns about Binance’s credibility. Prominent figures in the crypto community, like traders Peter Brandt and Mike Alfred, have expressed doubts about Binance’s actions.

Scandals, Scams, and Accusations

With multiple charges of scams, fraud, and violating regulations this all came as a full circle for Binance. Not only that they are further charged for providing manipulated screenshots and automated bot accounts involved in raising alarms about withdrawal issues.

Since last December, the exchange has faced heightened scrutiny following the collapse of FTX. Binance saw a large BTC withdrawal, but its CEO remained confident and emphasized the importance of “stress testing” exchanges.

Notably after this withdrawal, a CryptoQuant report found no suspicious on-chain activities related to Binance, and the situation seemed to stabilize according to Zhao. 

A Curious Development

In a distinct turn of events, reports surface that Binance has renamed Russian banks entangled in sanctions on its peer-to-peer platform. This development hints at the possibility of Binance enabling these banks to continue functioning despite the sanctions.

There is no doubt, the crypto community is fearing a ripple effect if Binance falls; and Moreno’s analysis adds fuel to the allegations. What do you say?

Also Read: Binance Reveals Plans to Combat Market Manipulation and Liquidity Issues