Binance, the world’s largest cryptocurrency exchange, has recently announced its decision to delist Bitcoin [BTC] and Ethereum [ETH] cross-margin and isolated margin pairs. This strategic move, effective November 28, is part of the crypto exchange’s proactive approach to addressing the increasing legal challenges within the digital asset industry.
The impacted pairs are directly linked to BUSD, a stablecoin created in collaboration with Paxos. The suspension of isolated margin borrowing on these pairs is set to occur on November 28, followed by the closure of auto-settled user positions and the cancellation of pending orders on December 7. This decision comes in response to allegations from the U.S. Securities and Exchange Commission (SEC), which previously classified BUSD as a security.
In response to this classification, both Paxos and Binance promptly ceased further minting and circulation of the stablecoin, aligning with the ongoing efforts of crypto exchanges to comply with evolving regulatory frameworks.
Earlier this week, CZ pleaded guilty and is set to stand trial for charges related to operating an unlicensed money transfer business, conspiracy, and violating restrictions, resulting in a substantial $4.3 billion fine for Binance. As the cryptocurrency space grapples with these regulatory challenges, the implications for the market remain uncertain. The delisting of major pairs and the leadership change at Binance underscore the mounting regulatory pressures faced by crypto exchanges globally, marking a pivotal moment for the industry.
Meanwhile, according to data from CryptoQuant, Bitcoin reserves are shifting from Binance to Coinbase. As of November 22, Coinbase’s reserves have surged by almost 12,000 BTC, while Binance’s have declined by 5,000 BTC, as noted by the research firm in a recent report. Analysts attribute the decrease in Bitcoin reserves to retail outflows.
Binance’s Bitcoin Reserves Drop
Concurrently, some market experts speculate that Binance’s recent settlement with the U.S. Department of Justice could be the final hurdle for obtaining approval for a spot Bitcoin ETF, influencing fund flows.
CryptoQuant identified a 1,000 BTC withdrawal from Coinbase, with suggestions that the transaction represents an “institutional over-the-counter [OTC] trade and can be seen as anticipation of approval of ETFs.”
Furthermore, CryptoQuant’s data reveals a consistent decrease in bitcoin reserves on exchanges throughout the year, considered a bullish indicator. However, certain analysts argue that since the collapse of FTX last year, trust in centralized exchanges has waned, prompting investors to store their holdings elsewhere.