The US Securities and Exchange Commission's (SEC) lawsuit against Binance accusing the cryptocurrency exchange of violating various securities laws has had a direct impact on the cryptocurrency market and the exchange's balance sheet.
According to data from cryptocurrency analytics firm Nansen, Binance had negative net flows of more than $778 million on the ethereum blockchain, with $871 million of inflows largely driven by $1.6 billion outflows from the exchange. As of 9:15AM UTC at the time of writing , the ethereum-based token has seen negative net flows in the 24 hours following the SEC charge, with $14.8 million in asset inflows and $50.5 million in asset outflow transactions in the past So an hour.
In the first hour after news of the SEC charges broke, Binance saw a net outflow of about $1.4 billion from its reserves, or 2.6% of its total reserve assets of $52.9 billion. Outflows from Binance across all protocols have reached $999 million in the p ast 24 hours. On the other hand, declining confidence in Binance has helped OKX become a top destination for traders, with the exchange recording massive inflows of over $190 million.
The recent net outflows, while large, are small compared to the March lawsuit filed against Binance by the US Commodity Futures Trading Commission. The same is true for December 2022, when Binance experienced massive outflows following the FTX crash. Also, net outflows are still Below the exchange's reserves. Cryptocurrency exchanges have healthy stablecoin balances of over $8 billion. In addition to the outflows on Ethereum, Binance also witnessed the largest outflows in Bitcoin Platform since the FTX crash. Over 20,000 BTC has been en withdrawn from exchanges in the past 24 hours. Another on-chain analysis shared by CryptoQuant showed a surge in transaction volume for users withdrawal funds following the announcement of the SEC lawsuit. However,they still haven't surpassed December 2022 when self-custody becomes more popular in the cryptocurrency market.
Market experts predict that the sharp increase in asset withdrawals from cryptocurrency exchanges reflects a decline in investor trust in centralized exchanges.
