Investors Withdraw $790 Million from Binance Exchange Following SEC Lawsuit
Investors have withdrawn approximately $790 million from the cryptocurrency exchange Binance and its U.S. subsidiary in the past 24 hours, according to Nansen, a data analytics company. This comes the day after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against both companies. Binance witnessed a net outflow of crypto tokens worth $778.6 million on the Ethereum blockchain, while Binance.US registered a net outflow of $13 million.
On Monday, the SEC sued Binance, its CEO Changpeng Zhao, and Binance.US for operating an “unregistered securities offering” and allegedly deceiving investors to evade U.S. securities laws. The SEC has levied a total of 13 charges, including artificially inflating trading volumes, misusing customer funds, and misleading investors about market control. This legal action marks the SEC’s most significant crackdown on the cryptocurrency industry this year.
“This is another blow to the crypto industry and global crypto exchanges,” commented Tony Sycamore, a market analyst at IG Markets, on the SEC lawsuit. In a statement on Monday, Binance claimed to have cooperated with the SEC and “worked diligently to address their concerns and resolve the issues,” including attempts at negotiation and resolution. “We intend to vigorously defend our platform,” stated a Binance representative.
Bitcoin has stabilized following a more than 5% drop, the worst daily decline since April 19. The world’s largest cryptocurrency hovered around $25,723, remaining unchanged throughout the day. Binance’s branded cryptocurrency BNB, the fourth-largest in the world, fell by 0.3% to nearly a three-month low of $277, following a 9.2% drop on Monday, the sharpest since November.
The SEC lawsuit is the latest legal headache for Binance. In March, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against the company for allegedly operating an “unregistered” exchange and engaging in “fictitious” compliance programs. The regulator accused the cryptocurrency exchange of facilitating illegal activity and engaging in trading manipulations. Zhao has maintained that the CFTC’s claims were an “incomplete recitation of facts.”
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- I'm Vasyl Kolomiiets, a seasoned tech journalist regularly contributing to global publications. Having a profound background in information technologies, I seamlessly blended my technical expertise with my passion for writing, venturing into technology journalism. I've covered a wide range of topics including cutting-edge developments and their impacts on society, contributing to leading tech platforms.
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