Examining Binance's asset stability amid SEC Lawsuit, growing FUD and more

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Jun 12

Despite market turbulence, Binance's assets showed only a modest decline, easing concerns.
Binance CEO addressed FUD, clarifying outflows and emphasizing the impact of price drops.

The recent lawsuit filed by the SEC against Binance and Coinbase has sent shockwaves through the crypto community, with Binance and its native token, BNB, being particularly impacted. Amidst the turbulence, many questions arise regarding the stability of Binance's assets and its ability to alleviate the FUD surrounding the exchange and its token.

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Looking at the assets

Despite concerns, data from on-chain analytics indicated that Binance's assets have not experienced a significant decline. The overall value of assets held on the platform decreased by approximately 13% in the past week, primarily due to the drop in cryptocurrency prices.

According to Binance's public address, the total assets haven't decreased significantly.

The total assets have decreased by ～13% in the past week, which is largely due to the crypto price drops.

Most assets have fallen between 6% and 38% over the past 7 days. @cz_binance pic.twitter.com/VYXLiTSr89

— Lookonchain (@lookonchain) June 10, 2023

While Binance's assets did not suffer a substantial decrease, its reserves have been on a declining trend in recent months. According to Dune Analytics' data, reserves showed significant reductions. As of now, the exchange's reserves comprise of 28.1% Ethereum, 17.4% BNB, and 17.0% BUSD.

Source: Dune Analytics

Some damage controls

Furthermore, Binance's CEO, CZ, took to Twitter to address concerns regarding outflows from the exchange. CZ clarified that the reported net outflow of approximately $392 million in the last 24 hours includes the impact of crypto price drops and should not be solely interpreted as a negative development.

CZ emphasized that measuring asset under management (AUM) changes and outflows are distinct, and some platforms overlook inflows. On days with significant price movements, arbitrage traders often move substantial funds between exchanges, surpassing regular activity levels.

Despite CZ's efforts to mitigate FUD, overall activity on Binance has dropped, which negatively impacted the revenue generated by the protocol.

Source: token terminal

Will BNB brb?

At present, BNB is trading at $236.69 with limited signs of recovery. Its development activity continued to decline suggesting that new upgrades and updates on the BNB network may take longer than expected.

Realistic or not, here's BNB market cap in BTC's terms