Binance Witnesses Massive Outflows Following SEC Lawsuit
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Binance, the world’s leading cryptocurrency exchange, is facing a major challenge as it experiences substantial net outflows triggered by the recent lawsuit filed against it by the United States Securities and Exchange Commission (SEC). Crypto traders are taking swift action, withdrawing their funds from the platform to mitigate the potential risks associated with the legal action. The fallout has resulted in significant losses for Binance, with millions of dollars worth of Bitcoin (BTC) and Ethereum (ETH) being withdrawn within the first day of the lawsuit.
The SEC lawsuit had an immediate impact on Binance’s net inflows, with 11,380 bitcoins worth approximately $303.8 million, using the current exchange rate, being withdrawn from the platform. Meanwhile, the outflow of ether amounted to 91,223 ETH, equivalent to roughly $171 million based on current market prices. These substantial outflows signify the determination of investors to safeguard their assets against potential counterparty risks arising from the SEC’s legal action against Binance.
Investors Withdraw Funds from Binance Amidst SEC Lawsuit
In response to the SEC’s lawsuit, investors are adopting a cautious approach and actively withdrawing their funds from Binance. The Nansen analytical platform also confirms a significant surge in ETH withdrawals, further underscoring the concerns of market participants.
Although the exact figures may vary slightly, the overall trend demonstrates a clear movement of assets away from the platform. Investors are being proactive in securing their investments amidst the regulatory uncertainties and legal challenges faced by Binance.
While the recent outflows following the SEC lawsuit are noteworthy, it is important to put them into perspective. CryptoQuant, a prominent blockchain analytics platform, highlights that they are relatively lower when compared to the outflows witnessed after Binance faced legal action from the Commodity Futures Trading Commission (CFTC) in mid-March.
Nonetheless, it is worth noting that during the period of regulatory uncertainty following the collapse of FTX, Binance encountered massive net outflows, with 40,353 BTC withdrawn in a single day, amounting to over $690 million. Additionally, between December 10 and December 16, 2022, the exchange experienced net outflows totaling a staggering $1.4 billion in BTC, accompanied by a significant surge in ETH outflows.
Although the current outflows are not as substantial as those seen during these previous instances, they still hold considerable weight in the market.
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