Binance’s customer assets increased by $42 billion in 2024, surpassing 200 million registered users, amidst regulatory obstacles.
TakeAway Points:
- 2024, according to Binance CEO Richard Teng, will be a “landmark year” with 200 million registered users and a $42 billion rise in customer assets.
- In spite of regulatory obstacles and Zhao’s legal troubles, Binance’s market recovery coincides with Bitcoin reaching a record high of $73,798 in March.
- As it deals with FlowBank SA’s insolvency, the business makes sure that client assets are appropriately kept separate and managed.
Binance sees Landmark Growth
This year has been a game-changer for Binance Holdings Ltd. due to notable growth and modifications in regulations. CEO Richard Teng gave a brief overview of the company’s achievements, pointing out that user assets on Binance’s cryptocurrency exchange will have increased by $42 billion by 2024.
This growth is attributed to a rebound in crypto prices and increased mainstream adoption. Binance has also reached a milestone of 200 million registered users, with monthly active users rising by 12.5% from February to May.
“The momentum continues to be very strong, which is a very encouraging sign for us,” Teng stated, emphasizing the participation of both institutional and retail investors.
Teng’s appointment as CEO in November followed a settlement with US authorities, which included over $4 billion in penalties and the removal of founder Changpeng “CZ” Zhao. Zhao, who remains Binance’s largest shareholder with a net worth of $41.9 billion, is currently serving a four-month sentence in California. Despite these challenges, Binance’s assets on its exchange have grown to approximately $114.6 billion, according to DeFiLlama. This growth aligns with a broader recovery in the cryptocurrency market, with Bitcoin reaching a record high of $73,798 in mid-March.
Regulatory and Operational Difficulties
Binance is navigating a complex regulatory landscape, with appointed monitors Sullivan & Cromwell and Forensic Risk Alliance now overseeing the firm. The company is also in discussions with several jurisdictions to determine the location of its headquarters.
Additionally, Binance is addressing the bankruptcy of FlowBank SA, a partner that allowed Binance’s clients to keep their trading collateral at the bank. Teng assured that “all assets should have been properly segregated and custodied,” despite FlowBank’s financial troubles.
The broader crypto market has seen $12 billion in net inflows year-to-date, according to a JPMorgan report. Spot Bitcoin ETFs have been a significant driver, attracting $16 billion in net inflows. However, JPMorgan analysts, led by Nikolaos Panigirtzoglou, noted that much of this inflow likely represents a rotation from existing digital wallets on exchanges to the new ETFs.
This rotation has resulted in a drop in Bitcoin reserves across exchanges, estimated at 0.22 million Bitcoin or $13 billion. The net flow into digital assets, therefore, stands at $12 billion, which is stronger than last year but lower than during the bull run of 2021/2022.
Evolution in Fintech Industry
The financial technology industry is also undergoing significant changes, with many executives and investors believing the sector has reached a “bottom.” At the Money20/20 event in Amsterdam, industry leaders discussed the recalibration of valuations from the highs of 2020 and 2021. Iana Dimitrova, CEO of OpenPayd, noted that the market now values businesses with solid use cases and business models.
“Value is now ascribed to businesses that manage to prove there is a solid use case, solid business model,” Dimitrova said.
Despite the challenges, some fintech companies are seeing growth opportunities. Nium, a Singaporean payments unicorn, recently announced a $50 million funding round, although its valuation fell to $1.4 billion. CEO Prajit Nanu believes the fintech market has reached its lowest point and sees this as an opportune time for consolidation and growth.
“I believe that this is the lowest end of the fintech cycle,” Nanu said, adding that Nium is eyeing several startups for acquisition opportunities.
