Sam Bankman-Fried’s FTX cryptocurrency As its empire collapsed in November, digital asset exchange Binance Holdings Ltd. saw a significant increase in trading activity.
Cryptocurrency Trading Activity on Binance Increases By 30% After FTX Collapse
Trading activity on the largest crypto exchange Binance increased by 30% last month as liquidity crunch led to the bankruptcy of FTX and wreaking havoc on the crypto market.
The trigger for the crash was Binance CEO Changpeng “CZ” Zhao’s announcement on November 6 that FTX’s native altcoin FTT was selling the stock’s holdings because it was too risky.
FTX was recognized as the second largest cryptocurrency spot and derivatives exchange after Binance.
Researcher Kaiko said in her December 5 report:
“Monthly trading volume of the largest exchanges rose 23% in November to $705 billion, supported by FTX-related fluctuations. The increase was mainly driven by Binance.”
According to the report, “Binance, despite not having an official HQ, could benefit from the situation because it has built a strong image during the crisis, demonstrating the best liquidity capacity among all centralized exchanges.”
The decline of FTX could also benefit US-regulated exchanges such as Coinbase and Kraken, which have experienced significant layoffs. According to the report, trading volume on exchanges also increased in November, while activity on smaller exchanges fell due to higher volume from users and institutions that were cautious about offshore exchanges.
*Not investment advice.
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