Amid the intensifying regulatory scrutiny surrounding Binance, the native coin BNB is experiencing pessimism in the derivatives market. Coinglass data reveals that the open interest-weighted funding rate for BNB turned negative over the weekend. This negative open interest signifies that traders who anticipate a price decline are willing to pay those holding bearish positions to keep them open.
As the world’s largest crypto exchange faces increased regulatory pressure from Australia, Europe, and the US, Binance and CEO Changpeng Zhao are confronted with serious allegations, including mishandling funds and providing false information to financial regulators by the US SEC.
Furthermore, the perpetual swap market for BNB has seen its open interest surpass $460 million. The negative open interest rate in this market reflects traders’ growing pessimism regarding the exchange’s token. However, trading BNB on the spot market proves challenging due to limited liquidity, making it difficult for speculators to short BNB.
Currently, BNB, the fifth-largest cryptocurrency by market cap, is trading slightly above $239, experiencing a 2% decline in the last 24 hours. While BNB briefly surged to $260 on July 14 following the Ripple lawsuit ruling, it has since faced downward pressure.
In addition to the regulatory challenges faced by Binance, its banking partners have withdrawn support due to uncertainty, limiting the exchange’s ability to facilitate fiat deposits and withdrawals. Binance is not alone in facing regulatory heat in the US, as Coinbase, the largest US-based exchange, is also engaged in a legal battle with the SEC, which holds implications for the future of the crypto industry in the country.