Bitcoin (BTC) Shifts from Binance to Coinbase

Bitcoin reserves on Binance have sharply declined, while statistics on rival platform Coinbase have doubled.

Bitcoin (BTC) is moving from Binance to Coinbase. Image: iStock

According to on-chain data from CryptoQuant, Binance is experiencing a significant outflow of Bitcoin, with a large amount shifting to the U.S.-based crypto giant Coinbase.

$BTC moving from Binance to Coinbase

"Coinbase's reserves have since increased by around 12,000 BTC while Binance's have decreased by 5,000 BTC."
by @gaah_im

Link ?https://t.co/92UQ3ODcIt— CryptoQuant.com (@cryptoquant_com) November 23, 2023

Since yesterday, following Changpeng Zhao's (CZ) admission of guilt and resignation as CEO, Coinbase's reserves have surged by approximately 12,000 BTC, contrasting with Binance's loss of 5,000 BTC.

Fluctuations in Bitcoin reserves and prices on Binance and Coinbase. Source: CryptoQuant

Bradley Park, an analyst at CryptoQuant, indicated that the entities driving the reserve shifts primarily consist of retail investors.

Greta Yuan, head of research at VDX, offered her perspective:

"The market remains unsettled amidst recent legal turmoil involving Binance. In the short term, we expect to see increased interest in alternative safe havens."

Representatives from Matrixport suggested that, through agreements with the U.S. Department of Justice, expectations for a Bitcoin ETF could potentially increase by 100%, as the crypto industry moves towards compliance with regulations akin to traditional finance.

The influx of Bitcoin into Coinbase may also stem from expectations surrounding the approval of spot ETFs in the U.S., rather than solely from legal uncertainties surrounding Binance. Notably, Coinbase has been selected by most Wall Street giants as the custodian for their ETF products. However, potential hurdles may cause the Securities and Exchange Commission (SEC) to further postpone approvals, according to BitGo's CEO.

Late on November 21 (Vietnam time), Changpeng Zhao officially admitted to charges related to money laundering and announced his resignation as CEO of Binance, as part of a $4.3 billion settlement agreement with the U.S. Department of Justice. This resolves years of investigation between the exchange and U.S. authorities, at least temporarily.

The significant outflow of funds is comparable to previous shocks, such as when Binance faced 13 SEC allegations in June. Nevertheless, Binance still holds over $65 billion in customer assets, maintaining its position as the world's largest crypto exchange.

In a letter to employees, CZ personally acknowledged wrongdoing, assumed full responsibility, and expressed confidence in Richard Teng—former Global Markets Director—as the new CEO. Zhao was also individually fined $50 million and faces a possible 18-month prison sentence. His sentencing is scheduled for February 23, 2024, with the Department of Justice requesting that he remain in the U.S. until then.

Commenting on the disruptive event, Coinbase CEO Brian Armstrong believes the cryptocurrency industry will experience a fresh start following Binance's misconduct.