CRYPTO MOVERS AND PRICES
Crypto were marginally lower this morning. Activity remains exceedingly quiet with spot volumes about 30% of the 30-day average.
CRYPTO STORY OF THE DAY
This week, Binance announced another regional licensed exchange, Binance.UK. The move further underscores a trend to such structures and speaks to further fragmentation in crypto liquidity.
The announcement implies that Binance.UK is a unique entity to that behind the firm's flagship Binance.com. According to Binance, the exchange is, “a Financial Conduct Authority (FCA) regulated platform.” The structure, as it's described in the press release, seems similar to Binance.US, which received a New York state Bit license as a separate entity. Investors will have the option of using GBP or EUR as their fiat on-ramps. The press release notes, “As an affiliate of Binance, Binance.UK connects to the broader ecosystem of Binance while catering to the U.K. and European markets.” However, how it accomplishes that connectivity isn’t specified. The launch is slated for “sometime this summer.”
Takeaway: The news underscores a trend in crypto towards liquidity fragmentation. In order to operate legally in G7 nations, Binance and others have clearly favored creating a new, untouched entity versus attempting to operate under their primary, Malta-based company. While Binance's announcements suggests some broader access to Binance-proper liquidity and products, logistics there remain a question mark. Binance.US, for example, reports less than 1% of the daily volume that Binance does and less than 5% of the activity of Coinbase Pro. The scenario seems likely to yield more inefficiencies in the market, creating opportunities for regionally agnostic arbitrageurs to bridge the gap.