Binance volume is unparalleled: Binance’s spot and derivatives trading activity has been unparalleled. For example, in the last 24 hours, Binance’s BTC perp has seen USDt 20.02B in volume. Few venues have comparable derivatives activity. For example, Singapore-based Bybit’s BTC perp has recorded USDt 5.93B in volume. BitMEX, which was once the leading derivatives provider before the CFTC brought charges against it in 2020, has recorded USD 612M in BTC perp volume over the past 24 hours. Binance’s dominance of crypto spot markets is similarly impressive. For instance, of the USD ~2.74B of BTC traded against USD or USDt on the Binance, Bitfinex, Coinbase, Kraken, and Bitstamp, the exchange accounted for 79% of the volume.
No other exchange lists as many tokens: Binance is known for its support for a wide range of tokens and trading pairs. For instance, the exchange’s spot market consists of 2,174 trading pairs. Between it and Huobi, Coinbase, Kraken, and Bistamp, Binance accounts for 39% of listed trading pairs. Coinbase, for comparison, has 589 trading pairs. Binance offers traders uniquely wide exposure to the crypto market. The venue also offers a sophisticated derivatives market for esoteric tokens, allowing traders to hedge DeFi trades. This has allowed Binance to significantly contribute to the expansion of the BNB Chain ecosystem.
In some jurisdictions, Binance appears to be synonymous with crypto: In the US, Google searches for ‘coinbase’ dominate those for ‘binance.’ Globally, however, Binance is the more searched for venue. Comparing global searches for ‘crypto’ and ‘binance,’ the venue is less searched. However, in some jurisdictions, such as Russia, Poland, Ukraine, Turkey, Brazil and Argentina, ‘binance’ was searched for more than ‘crypto.’
Charges against BitMEX caused the venue to lose market share: In yesterday’s morning note, we cited the CFTC charges against BitMEX as highly relevant to Binance’s situation. The charges, announced in October 2020, caused an outflow of BTC from the venue. In March 2020, BitMEX held an estimated BTC 315,406 (for comparison, Bitfinex currently holds an estimated BTC 317,064; the exchange, however, is not a 1-to-1 comparison as it accepts fiat deposits, unlike BitMEX). In the days following the charges, BitMEX saw an outflow of BTC 67,222. BitMEX currently holds BTC 62,771. As of yesterday, Binance held an estimated BTC 642,538. In regards to Binance, the exchange achieved record high holdings of BTC 668,846 in December 2022, despite numerous media reports on regulatory scrutiny of the venue, foreshadowing an enforcement action. Media has begun to cite data on outflows of crypto from Binance. WSJ, for example, published an article this morning titled ‘Binance Sees $2 Billion in Outflows as Troubles Compound. It should be noted however, Binance has previously seen significant withdrawals during episodes of counter-party anxiety. In yesterday’s note, we noted that BitMEX ‘saw significant withdrawals and lost its dominant position in crypto derivatives, but continued to function normally.’ It remains to be seen how the ongoing case with the CFTC will impact Binance.
CRYPTO HEADLINES
The Ethereum Foundation announced details of its planned ‘Shapella network upgrade,’ which is expected to take place April 12. The team group behind the project is coordinating to activate the upgrade, which will allow ‘validators to withdraw their stake from the Beacon Chain back to the execution layer,’ at 22:27:35 UTC. - link - @EthereumFoundation
Binance executives instructed employees to hide the exchange’s presence in China, according to internal evidence referenced by the Financial Times. The report states that the exchange maintained an office in China until at least the end of 2019, and also maintained a Chinese bank account to pay wages. - link - @FT
Chicago-based Radix Trading, LLC, told the WSJ that it is the entity the CFTC referred to as ‘Trading Firm A’ in the agency’s lawsuit against Binance. In the suit, the CFTC alleges Binance allowed US-based customers to access its platform despite claiming to not operate in the jurisdiction, and pointed out three unnamed trading firms in New York and Chicago in its arguments. - link - @WSJ
The Canadian government will require pension funds to disclose crypto exposures to the Office of the Superintendent of Financial Institutions (OSFI). In its Budget 2023 report, the government added that OSFI will also ‘consult federally regulated financial institutions on guidelines for publicly disclosing their exposure to’ the asset class. - link - @CoinDesk
The Financial Times reported that Genesis Global executives were given early access to invest in FTX-affiliated crypto projects. Citing sources ‘familiar with the matter,’ FT wrote that Bankman-Fried allowed executives of the collapsed lender to participate in the ‘presales’ FTX’s exchange token, FTT, and SRM, a Solana-based DeFi project backed by both FTX and Alameda Research. - link - @FT
US prosecutors have added to criminal indictments against former FTX CEO Sam Bankman-Fried, charging him with bribery conspiracy. Bankman-Fried is accused of having ordered the payment of bribes to Chinese officials totaling USD ~40M worth of crypto in an attempt to have Alameda accounts holding over USD 1B of crypto unfrozen. - link - @Reuters
Ticketmaster launched token-gated ticket sales in partnership with rock band Avenged Sevenfold earlier this week. The feature requires fans to unlock access to purchasing tickets for events through ownership of specific NFTs. Avenged Sevenfold rewarded holders of its Ethereum-based Deathbat NFT collection with priority access to upcoming shows. - link - @Ticketmaster
BNB Chain-based DeFi venue Safemoon suffered an exploit last night resulting in a loss of USD ~9M worth of crypto. PeckShield, a blockchain security and data analytics company, described the vulnerability as a ‘public burn bug,’ which was created during the protocol’s recent upgrade. - link - @TheBlock
US and South Korean prosecutors are looking to extradite Do Kwon, the co-founder of development firm Terraform Labs and Terra (LUNA). Last week, Do Kwon was arrested in Montenegro, and was said to be traveling with falsified documentation. Montenegro’s justice minister said a judge will determine how they would proceed. - link - @Bloomberg
TOP ARTICLES
Bloomberg: Bitcoin is Rallying Toward $30,000 Again In the Wake of Binance's Legal Woes
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OPEN-SOURCE RESEARCH / LONG-READ OF THE DAY
How We Built Chainalysis’ Robust Knowledge Graph for Solana Transactions, Chainalysis, March 22, 2023
Crypto analytics firm Chainalysis discusses its approach to capturing data from the Solana network.
CRYPTO MULTIMEDIA
Why Zero-Knowledge Proofs Are Critical to Ethereum’s Future, Unchained Podcast, March 28, 2023
Stanford cryptography professor Dan Boneh and a16z General Partner Ali Yahya talk about the perceived significance of 'zero-knowledge proofs.'