In a recent revelation, Binance CEO Richard Teng shared that the exchange experienced record inflows and one of its highest trading volumes this year. Teng reported a net inflow of $1.2 billion in the past 24 hours, based on DefiLlama’s CEX Transparency metrics. According to data from DeFillama, Binance’s inflows had reached over $2 billion at the time of the announcement, surpassing its closest competitor Bybit by a factor of 5. This surge in inflows is not surprising, given that Binance is the largest cryptocurrency exchange by trading volume and commands approximately 50% of the market, as per Kaiko data.
The surge in inflows to Binance comes at a time of market turmoil, with global stock and crypto markets experiencing significant declines on August 5th. A spike in the Japanese yen triggered a rapid unwinding of carry trades, leading to a sell-off and substantial losses for investors holding major digital assets like Bitcoin and Ethereum. Despite the market turbulence, Teng highlighted that the substantial inflow to Binance reflects strong investor confidence in the platform.
However, Binance is currently grappling with significant tax issues in India. Reports from The Times of India revealed that the Directorate General of Goods and Service Tax Intelligence (DGGI) demanded 722 crore Indian rupees ($86 million) from Binance for unpaid Goods and Services Tax (GST). It was disclosed that Binance had generated over 4,000 crore Indian rupees (more than $400 million) from Indian clients, with these funds being channeled to Nest Services Limited, a Binance Group entity based in Seychelles. Subsequently, Indian tax authorities issued notices to Binance offices in Seychelles, the Cayman Islands, and Switzerland. Initially, these notices were overlooked, but Binance has now engaged a local attorney to address the tax concerns. This incident signals the first instance of Indian tax authorities targeting a cryptocurrency firm with formal notices.
Binance’s recent surge in inflows and trading volumes amidst market volatility underscores the platform’s resilience and investor trust. However, the looming tax challenges in India serve as a reminder of the regulatory hurdles facing cryptocurrency exchanges in various jurisdictions. As the cryptocurrency landscape continues to evolve, exchanges like Binance must navigate regulatory complexities while maintaining a robust market presence.