Nearly $4 Billion Withdrawn from Binance and Coinbase Following SEC Lawsuits
Cryptocurrency exchanges Binance and Coinbase are facing nearly $4 billion in withdrawals as a result of actions by the U.S. Securities and Exchange Commission (SEC). The SEC has accused these platforms of violating U.S. laws, leading to a mass exodus of funds from their clients’ accounts.
The lawsuits filed by the SEC against Binance, Binance.US, and Coinbase have triggered an outflow of funds totalling $4 billion, according to blockchain data. From Monday to Thursday, the net outflow amounted to $3.1 billion on the Ethereum network and $864 million in Bitcoin, analytics agencies Nansen and Glassnode reported. Net outflow means the withdrawal of funds exceeded the amount deposited. The exchanges are diligently processing all transactions.
The SEC brought a lawsuit against international cryptocurrency exchange Binance, its U.S. version Binance.US, and personally against platform head Changpeng Zhao on Monday for several violations of U.S. securities law. The next day, the agency sued Coinbase, accusing the platform of selling unregistered securities to the public. These actions have roiled the cryptocurrency market, causing tokens such as BNB, ADA, and MATIC, which the regulator classified as securities, to significantly depreciate over the week. However, the SEC’s efforts to freeze Binance.US assets and the platform’s subsequent rejection of the dollar caused Bitcoin and Ethereum to appreciate as traders began to withdraw assets.
According to Nansen, Binance, the world’s largest cryptocurrency exchange by trading volume, experienced a net outflow of $2 billion on the Ethereum blockchain alone over four days. This included the exchange’s own ETH coin and other cryptocurrencies on the network. The volume of Bitcoin withdrawals during the same period exceeded the deposits by $838 million, Glassnode added. Wednesday saw a net outflow of 13,953 bitcoins, the largest daily decline since December of last year, when an inaccurate message about the platform’s reserves caused investors to lose confidence in it. This came amidst the turmoil surrounding the bankruptcy of cryptocurrency exchange FTX.
In absolute terms, the withdrawal of funds seems significant, but considering Binance’s wallet data, it accounts for only 5% of the platform’s total assets. Nansen reports that Coinbase experienced a net outflow of $1 billion via Ethereum during the same period, and Glassnode reports a Bitcoin outflow of $25 million.
- 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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