Crypto Exchange Binance is not likely to fail

[Tokenz]

Business
Crypto Exchange Binance Not Likely to Fail
The app demonstrated its robustness when about $6 billion of customer funds were withdrawn on Dec. 13, a Bernstein report said.
By Will Canny

Jan 3, 2023 at 6:38 a.m. CST
Updated Jan 3, 2023 at 8:52 a.m. CST

Crypto exchange Binance is in a strong position, Bernstein wrote in a research note. (Unsplash)

Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Secure Your Seat

Binance is solvent, liquid and stable, which is evident in the exchange’s more than $55 billion in verifiable cold wallet addresses, Bernstein said in a research report Monday.

The crypto exchange can also “pass the test of withdrawals” as it did when $6 billion of customer funds were withdrawn on Dec. 13, the report said.

“Binance’s undisputed market leadership has not been an accident – it has a long history of doing right by the customer,” the report added, noting that the exchange has made customers whole through hacks and regulatory challenges. The exchange now accounts for about 75% of the global crypto trading market.


Bernstein says Binance faces two challenges. First, it has an offshore holding company based out of the Cayman Islands, which means it must take “progressive steps moving towards an on-shore structure,” even at the cost of short-term business.

Second, following the demise of crypto exchange FTX, it is now a “virtual monopoly in global crypto trading.” While it can't do much about its monopolistic position, competition may now emerge from decentralized exchanges, as traders could diversify their activities toward self-custody and decentralized trading platforms.

Binance will continue to seek licenses across multiple jurisdictions. It has obtained licenses from 14 countries so far, including France, Italy, Spain and Canada, the note added.

Read more: Bernstein: Returns From Buying Crypto During Downturns Have Been Spectacular

Read more about
BinanceAnalysisCrypto ExchangeBernstein
Sign up for The Node, our daily newsletter bringing you the biggest crypto news and ideas.
Email address
By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our terms of services and privacy policy.
DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.


Will Canny

Will Canny is CoinDesk's finance reporter.

BTC$16,649.53
0.46%
ETH$1,209.33
0.74%
BNB$245.46
0.53%
XRP$0.34276662
2.12%
BUSD$1.00
0.15%
View All Prices

 

[M.W.]

What have funds in cold wallets and the technical ability to withdraw funds to do with the health of the company? Nothing whatsoever. For what it's worth the company might still have been able to siphon customer funds and comingle them with corporate assets and store some customer funds in a fictitiously created cold wallet that it owns and has full control over and included in the cold storage account sum of balances. Just saying that this proves nothing at all.

Business
Crypto Exchange Binance Not Likely to Fail
The app demonstrated its robustness when about $6 billion of customer funds were withdrawn on Dec. 13, a Bernstein report said.
By Will Canny

Jan 3, 2023 at 6:38 a.m. CST
Updated Jan 3, 2023 at 8:52 a.m. CST

Crypto exchange Binance is in a strong position, Bernstein wrote in a research note. (Unsplash)

Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Secure Your Seat

Binance is solvent, liquid and stable, which is evident in the exchange’s more than $55 billion in verifiable cold wallet addresses, Bernstein said in a research report Monday.

The crypto exchange can also “pass the test of withdrawals” as it did when $6 billion of customer funds were withdrawn on Dec. 13, the report said.

“Binance’s undisputed market leadership has not been an accident – it has a long history of doing right by the customer,” the report added, noting that the exchange has made customers whole through hacks and regulatory challenges. The exchange now accounts for about 75% of the global crypto trading market.


Bernstein says Binance faces two challenges. First, it has an offshore holding company based out of the Cayman Islands, which means it must take “progressive steps moving towards an on-shore structure,” even at the cost of short-term business.

Second, following the demise of crypto exchange FTX, it is now a “virtual monopoly in global crypto trading.” While it can't do much about its monopolistic position, competition may now emerge from decentralized exchanges, as traders could diversify their activities toward self-custody and decentralized trading platforms.

Binance will continue to seek licenses across multiple jurisdictions. It has obtained licenses from 14 countries so far, including France, Italy, Spain and Canada, the note added.

Read more: Bernstein: Returns From Buying Crypto During Downturns Have Been Spectacular

Read more about
BinanceAnalysisCrypto ExchangeBernstein
Sign up for The Node, our daily newsletter bringing you the biggest crypto news and ideas.
Email address
By signing up, you will receive emails about CoinDesk product updates, events and marketing and you agree to our terms of services and privacy policy.
DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.


Will Canny

Will Canny is CoinDesk's finance reporter.

BTC$16,649.53
0.46%
ETH$1,209.33
0.74%
BNB$245.46
0.53%
XRP$0.34276662
2.12%
BUSD$1.00
0.15%
View All Prices

 

[misterkel]

What have funds in cold wallets and the technical ability to withdraw funds to do with the health of the company? Nothing whatsoever. For what it's worth the company might still have been able to siphon customer funds and comingle them with corporate assets and store some customer funds in a fictitiously created cold wallet that it owns and has full control over and included in the cold storage account sum of balances. Just saying that this proves nothing at all.

It proves actual people were able to withdraw 6bn in funds in a very short period.
Try that with most banks.

 

[M.W.]

Nonsense, 6bln constitutes around 10% of deposits. Of course everyone expects that 10% of the total can be easily withdrawn, why not? That is how the system was supposedly designed so this is nothing to brag about at all. Nothing proves that customer assets are truly held in segregated accounts and have never been touched.

It proves actual people were able to withdraw 6bn in funds in a very short period.
Try that with most banks.

 

[Tokenz]

What have funds in cold wallets and the technical ability to withdraw funds to do with the health of the company?

It has everything to do with it. Being financially strong is the foundation of what makes customers put more trust into a company and helps it grow. Do you know anything about business?

 

[traderjoe200]

If Super Spud Tokenz posted it - you already know its shit...

 

[traderjoe200]

Funny how he went from crypto cheerleader to now " its not likely to fail" lol

 

[misterkel]

Nonsense, 6bln constitutes around 10% of deposits. Of course everyone expects that 10% of the total can be easily withdrawn, why not? That is how the system was supposedly designed so this is nothing to brag about at all. Nothing proves that customer assets are truly held in segregated accounts and have never been touched.

Nonsense? I said: "It proves that 6bn could be withdrawn in a short period." I said that because it actually happened.
You added on whatever you said (that I don't care about).
Did clients withdraw 6bn or not? IF they did, then my assertion was correct. I did not make any additional claims, so what was nonsense?

 

[M.W.]

That does not prove any point other than saying that 6bln was withdrawn, which is why I called this statement nonsense.

Nonsense? I said: "It proves that 6bn could be withdrawn in a short period." I said that because it actually happened.
You added on whatever you said (that I don't care about).
Did clients withdraw 6bn or not? IF they did, then my assertion was correct. I did not make any additional claims, so what was nonsense?

 

[M.W.]

Trust? Lol, this term does not even exist in your fictional world. Or perhaps it can be found floating around somewhere in the metaverse as an nft token.

It has everything to do with it. Being financially strong is the foundation of what makes customers put more trust into a company and helps it grow. Do you know anything about business?