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As US regulators continue to target cryptocurrency companies and exchanges, the Bitcoin (BTC) and Ethereum (ETH) reserves in US-based crypto exchanges have plunged below 50%.
BTC Reserves at Lowest Level Since January 2017
BTC and ETH reserves on US-based crypto exchanges have fallen below 50% in the midst of increasing regulatory pressure in the country. A research report shared by CryptoQuant last week noted, “US-based crypto exchanges have fallen behind offshore/international crypto exchanges in terms of the amount of Bitcoin they keep for their customers. BTC reserves on US-based crypto exchanges are at their lowest level since January 2017.”
Crypto reserves, which refer to the amount of coins and tokens held by crypto exchanges on behalf of their users, typically facilitate trading transactions and serve as a measure of liquidity. A reduction in crypto reserves indicates that users may be pulling their assets from crypto exchanges due to security concerns or transferring their funds to private wallets.
US Regulators Exerting Pressure on Cryptocurrencies
The continued pressure on the crypto sector by US regulators is driving interest towards international crypto exchanges. The US Securities and Exchange Commission’s (SEC) lawsuits against Binance and Coinbase for alleged securities law violations demonstrate the increasingly harsh regulatory environment in the country. Meanwhile, jurisdictions like Hong Kong have recently adopted crypto-friendly policies in a bid to attract more crypto companies, exchanges, and investors.
CryptoQuant, commenting on the situation, stated, “The US federal government and regulators are making operations more difficult for US-based crypto companies. The SEC has not provided clarity on how crypto exchanges can comply with the rules. Precisely for this reason, some crypto exchanges have decided to halt their operations in the US, while others have announced new platforms to operate outside the country.”
Last week, Johnny Ng, a member of the Hong Kong Legislative Council, openly invited Coinbase and other crypto exchanges to operate in the region. Ng tweeted his invitation, saying, “I invite all global crypto trading platforms, including Coinbase, to come to Hong Kong for the implementation and further development plans of official trading platforms. Please don’t hesitate to approach me; I am more than happy to provide any assistance.”
