$4B outflows from Binance, Binance.US, and Coinbase.

  • The US Securities and Exchange Commission (SEC) has filed lawsuits against both Coinbase and Binance for allegedly breaking federal securities laws.
  • The majority of the money leaving the exchanges is happening through the Ethereum Network.
  • Between Monday and Thursday, there was a net outflow of $3.1 billion through the Ethereum network alone.

The SEC initially sued Binance, its American firm Binance.US, and CEO Changpeng “CZ” Zhao for violating securities laws on Monday before expanding to include Coinbase in the lawsuit on Tuesday. The SEC claims that Coinbase sold unregistered securities to the public.

The SEC’s lawsuit has caused concern amongst investors as the SEC argues that some of the crypto assets listed on these exchanges are securities rather than digital assets. The identified tokens have seen a significant price decrease, with Binance’s BNB, Polygon’s MATIC, and Cardano’s ADA experiencing the largest drops.

$4 billion in outflows in four days

According to data from blockchain analytics firms Nansen and Glassnode, Binance, Binance.US, and Coinbase have experienced a net outflow of $3.1 billion through the Ethereum network and $864 million in bitcoin (BTC) between Monday and Thursday.

Despite the regulatory challenges, the exchanges have processed withdrawals promptly throughout the week, and there have been no reported delays so far.

Binance, the world’s largest cryptocurrency exchange by trading volume, saw a net outflow of $2 billion on the Ethereum blockchain in just four days, according to Nansen data. This amount includes all Ethereum-based tokens, including ETH. According to Glassnode’s data, BTC withdrawals were higher than deposits by about 31,868 BTC ($838 million).

Binance experienced a significant net outflow on Wednesday of 13,953 BTC, the largest daily drawdown since December, when a faulty reserve report and the collapse of a rival exchange, FTX, undermined investor confidence.

Although the outflows seen this week were sizable, according to Binance’s crypto wallets, they only account for about 5% of all the assets held on the exchange.

Binance.US saw net outflows of $75 million from the Ethereum network, according to Nansen. The exchange is not tracked by Glassnode, so it is difficult to track the BTC outflows. However, the SEC has sought orders to freeze all .Binance.US assets.

For Coinbase, the Ethereum network saw a net outflow of $1 billion from Monday through Thursday, according to Nansen. According to Glassnode’s data, Coinbase saw $25 million worth of Bitcoin outflows.

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