Bitcoin Withdrawals Reach Record High as $2 Billion Leaves Exchanges

Here are some of the major developments in the world of crypto over the past few days.
some of the major developments in the world of crypto
some of the major developments in the world of crypto

Bitcoin is experiencing a significant trend of daily withdrawals from exchanges, reminiscent of mid-2021, and is poised to set new historical records in terms of the value of Bitcoin leaving exchanges. On March 1 alone, withdrawals amounted to approximately $2 billion, according to data from on-chain analytics firm Glassnode. This rapid pace of withdrawals is occurring as Bitcoin's price action approaches all-time highs, indicating a strong demand for holding Bitcoin off exchanges.

The withdrawals are not only significant in terms of value but also in volume, with over $2.3 billion worth of Bitcoin leaving exchanges on a single Friday, marking one of the largest withdrawals in over five years. The trend is partly attributed to the launch of United States spot Bitcoin exchange-traded funds (ETFs), with a notable amount of Bitcoin being withdrawn from exchanges like Binance and Coinbase. Despite the substantial outflows, the total Bitcoin assets available on major trading platforms are at their lowest since March 2018, indicating a decreasing supply of Bitcoin on exchanges.

Simultaneously, there is evidence of new entities entering the Bitcoin market, as reflected in changes in unspent transaction output (UTXO) ages. More "younger" coins are being transacted, suggesting the involvement of new investors. This influx of new investors is expected to continue, potentially leading to a decline in the ratio of "older" coins that have been dormant for six months or more. This shift in market composition indicates a growing interest in Bitcoin among individual investors, which could contribute to a sustained bull market in the future.

UK authorities will soon have fewer restrictions when seizing crypto

The United Kingdom is set to implement new measures in its economic crime legislation from April 26, which will allow authorities to seize crypto assets without the need for a conviction. The changes, outlined in statutory instrument documentation released by the government, expand the power of the National Crime Agency to freeze and confiscate crypto assets suspected to be involved in illicit activities. This includes the ability to retrieve assets directly from exchanges and custodian wallet providers, with the option to destroy them if necessary.

The legislation aims to enhance the authorities' ability to combat crimes involving cryptocurrencies, such as cybercrime, scams, and drug trafficking. One notable provision allows for the recovery of crypto assets without requiring an arrest first, particularly useful when dealing with individuals located overseas. However, concerns have been raised about the effectiveness of the U.K. authorities in handling crypto crimes, with some victims feeling that their cases were not adequately addressed.

Looking ahead, the U.K. government also intends to introduce new regulations for stablecoins and crypto staking within the next six months. Economic Secretary to the Treasury Bim Afolami emphasized the government's commitment to completing these regulations before the next election, slated to occur no later than Jan. 28, 2025.

Nigerian Committee Summons Binance CEO Amid Financial Crime Suspicions

The Nigerian House of Representatives Committee on Financial Crimes has summoned Binance CEO Richard Teng to appear before them regarding suspicions of terrorism financing and money laundering. The committee's Chair, Ginger Onwusibe, issued an ultimatum for Teng to appear on or before March 4, 2024. This summons follows concerns raised by the governor of the Central Bank of Nigeria (CBN) about "suspicious flows" of funds through Binance in 2023.

Onwusibe expressed disappointment at Teng's failure to attend despite multiple invitations, stating that it reflects a neglect of existing laws governing business and financial operations in Nigeria. The committee emphasized its commitment to combating financial crimes and highlighted its constitutional authority to safeguard Nigerians from such crimes, especially those involving foreign companies like Binance.

In related developments, the National Security Adviser's office reportedly detained two senior Binance officials in Abuja, the Nigerian capital, as part of the government's efforts to regulate cryptocurrency exchanges. Binance had recently removed the Nigerian naira from its peer-to-peer (P2P) service amid a crackdown on the crypto exchange. Despite Nigeria's previous ban on cryptocurrency transactions, the CBN lifted the ban in December 2023 and issued guidelines for regulating virtual asset service providers. Nigeria also launched a central bank digital currency in 2022 and saw the launch of a naira-pegged stablecoin in February 2024.

Related Stories

No stories found.
Outlook Business & Money