Market analysis firm Bernstein pointed out in a research report on Monday that Binance is solvent, liquid and stable, which can be confirmed by the exchange's cold wallet addresses worth more than $55 billion.
The report said Binance was also able to “pass the withdrawal test,” such as when about $6 billion in customer funds were withdrawn on December 13 last year, proving its robustness. The report added that “Binance’s undisputed market leadership is no accident — it has a long history of doing the right thing for its customers.”
Bernstein said Binance faces two challenges. First, it has an offshore holding company in the Cayman Islands, which means it must take "incremental steps toward an onshore structure," even at the expense of short-term business. Second, with the collapse of FTX, it is now a "virtual monopoly on global crypto trading." Although it cannot change its monopoly, it may face competition from decentralized exchanges as traders can diversify their activities to self-custody and decentralized trading platforms.
Binance will continue to seek licenses in multiple jurisdictions, and has already obtained licenses in 14 countries, including France, Italy, Spain and Canada. (CoinDesk)
