The world’s largest crypto exchange Binance is witnessing significant net outflows as thousands of crypto traders withdraw their funds from the platform following the latest lawsuit from the United States Securities and Exchange Commission (SEC).
According to on-chain data from the blockchain analytics platform CryptoQuant, Binance recorded a net outflow of 11,380 BTC just the first day after the lawsuit was filed. With bitcoin trading at $25,739 at the time of writing, this makes a whopping $292.9 million in BTC outflows.
The data from CryptoQuant also revealed that the net outflow on ether (ETH) had reached 91,223, worth approximately $165.4 million at current market prices. The massive outflows are an attempt by investors to avoid any counterparty risks resulting from the SEC lawsuit against Binance.
Interestingly, Nansen also confirmed the larger number of ETH withdrawals, but the actual figures are slightly different.
Netflow to Binance over the past 24 hours is $778.6M negative on Ethereum – $871.7M in and $1.65B out
Over the past hour, netflow on Ethereum continues to be negative at $35.7M on Ethereum – $14.8M in and $50.5M out
Track it here https://t.co/nwTgpXWhZY and filter for “Binance” pic.twitter.com/jnNAN0QKVy
— Nansen 🧭 (@nansen_ai) June 6, 2023
Not The Worst
CryptoQuant, however, noted that while the recent surge in withdrawals from Binance is relatively higher than the amount recorded by the exchange after it was sued by the CFTC in mid-March, they are smaller than some other significant outflows.
The report referenced the period of “regulatory FUD” following the collapse of FTX, where Binance recorded net outflows of 40,353 BTC, worth over $690 million, in one day. The exchange saw net outflows totaling $1.4 billion in BTC between December 10 and December 16, 2022. The ETH outflow was also at its peak at the time.
SEC Lawsuit Sparks Panic
The latest outflows result from recent claims made by the SEC alleging that Binance and its executive, Changpeng Zhao, breached multiple federal securities laws.
The lawsuit, which was filed on Monday, pointed out that the exchange’s American affiliate Binance.US had engaged in the sale of unregistered crypto securities, including BNB and BUSD tokens, without any authorization.
Among the many accusations, the SEC also claimed that the exchange wrongly moved and commingled customer funds and that CZ “secretly” remained in control of Binance.US despite claiming to be independent of the American entity.
While Binance has denied the claims made by the SEC, the lawsuit’s effect has already injected fresh panic into the crypto market, with BNB and other major assets trading in the red.
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