TL;DR
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The SEC’s crackdown on Binance and Coinbase has resulted in $4 billion being pulled from the platforms in the past week.
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The good news is that both Binance and Coinbase have so far handled these withdrawals like absolute champs and handled all outflows in an orderly manner.
Full story
We feel like we’re saying this way too late, but…
We have good news and bad news.
The bad news is:
The SEC’s crackdown on Binance and Coinbase has resulted in $4 billion being pulled from the platforms in the past week.
The less money is held on these platforms → the less crytpo is traded on them → the less money they make from fees → the more financial stress they face.
The reason why people are afraid to see these centralized exchanges come under financial strain is twofold:
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Centralized exchanges play a vital role in space as ramps and exits. Without centralized exchanges, it becomes much more difficult to convert your money into crypto (and vice versa).
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ftx. …specifically, the last time we saw a major centralized exchange come under pressure, it collapsed and took everyone’s crypto with it.
Which brings us to…
The good news!
So far, both Binance and Coinbase have handled these withdrawals like absolute champs and handled all outflows in an orderly manner.
The silver lining (for Binance and Coinbase):
If both platforms can weather this regulatory storm in the US, that robustness will earn a ton of brand confidence once the dust settles.