Binance, the world’s largest cryptocurrency exchange, faced regulatory scrutiny from various countries last year, resulting in a decline in market share. However, recent data shows that funds are flowing back to the exchange. Since reaching an agreement with US regulators on November 21, Binance has seen a net inflow of $4.6 billion, surpassing its competitors.
In November last year, Binance agreed to pay a $4.3 billion fine to the US Department of Justice and the Commodity Futures Trading Commission (CFTC) as part of a settlement. Binance founder Changpeng Zhao admitted to violating US anti-money laundering laws and stepped down as CEO.
Due to regulatory pressure, Binance’s market share has been continuously declining since February last year, with many users turning to other centralized exchanges. In December, Binance’s spot trading volume market share dropped to 38.45%, a significant decrease from 62.25% in February, evaporating nearly 38% of its market share.
However, it appears that funds are flowing back to Binance. According to Defilllama data, since reaching an agreement with US regulators on November 21, Binance has seen a net inflow of $4.6 billion, surpassing its competitors such as OKX with $2.6 billion and Bybit with $1.1 billion.
In January so far, Binance has attracted $3.5 billion in fund inflows, surpassing any monthly inflow since November 2022.
This influx of funds is good news for Richard Teng, who took over as CEO of Binance after Changpeng Zhao stepped down. Binance had a tough year in terms of declining market share and fund outflows, but its spot market share has stabilized since December after nine consecutive months of decline. Binance’s native token, BNB, has also risen nearly 40% since November 21, outperforming Bitcoin’s 15% increase during the same period.
To a large extent, Binance has benefited from the recovery of the cryptocurrency market. Although Richard Teng faces many challenges, traders are still transferring funds to Binance. According to the settlement agreement, Binance must establish a global headquarters, appoint a board of directors, and appoint an independent supervisor for a three-year term.
However, despite the significant influx of funds, Binance still faces regulatory pressure from multiple countries. Binance currently operates without official licenses in major cryptocurrency centers such as Singapore, Dubai, and Hong Kong. It is also facing a lawsuit from the US Securities and Exchange Commission (SEC).
Last year, Binance faced setbacks in Australia, Belgium, and other countries due to operating without a license. More recently, Binance was dealt another blow in India. Indian authorities accused Binance and other overseas exchanges of illegal operations. In addition, the apps of nine mainstream cryptocurrency exchanges, including Binance, have been removed from the Indian Apple App Store.
Overall, Binance is experiencing a resurgence in funds despite ongoing regulatory challenges.