Crypto exchange Binance hit by outflows of almost $1 billion in last 24 hours
Nickie Louise
Posted On June 6, 2023
Crypto Investors have withdrawn around $780 million from the world’s biggest crypto exchange Binance in the last 24 hours, according to data firm Nansen. The news comes just a day after Binance was sued by the U.S. Securities and Exchange Commission (SEC).
Yesterday, the SEC filed 13 charges against Binance and its founder with violations of securities laws. In its complaint, the SEC also cited the infamous 2018 statement made by Binance’s chief compliance officer, “We are operating as a f****** unlicensed securities exchange in the USA bro.”
This statement is now coming back to haunt Binance as investors pulled their funds from the company. According to Nansen, the net outflow was about $780 million
“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://pro.nansen.ai/exchange-flows and filter for “Binance””
https://twitter.com/nansen_ai/status/1665999474685284353
Nansen added that Binance’s U.S. affiliate exchange also registered net outflows of $13 million during the same period.
The SEC also added that Binance and Zhao artificially inflated trading volumes and diverted customer funds, and also failed to restrict U.S. customers from its platform, and misled investors about market surveillance controls. The SEC said they also secretly controlled customers’ assets, allowing them to commingle and divert investor funds “as they please.”
Meanwhile, in a blog post, Binance said: “We intend to defend our platform vigorously,” adding that “because Binance is not a U.S. exchange, the SEC’s actions are limited in reach.”
The news sent shockwaves to crypto-related companies, causing fluctuations in their stock prices. Shares of Coinbase Global, a rival crypto exchange, experienced a significant drop of 11.6%. Similarly, Bitfarms Ltd, a blockchain farm operator, saw a decline of 5.8% in its stock value.
Crypto mining companies were also impacted, with Riot Platforms Inc falling by 8.2%, Marathon Digital (MARA.O) down by 8.7%, Hut 8 Mining decreasing by 3.9%, and Bit Digital experiencing an 8.1% drop. Additionally, the shares of MicroStrategy, a software firm and Bitcoin buyer, declined by 8.4%.
It’s worth noting that in March, Binance and Zhao faced a lawsuit filed by the U.S. Commodity Futures Trading Commission. The lawsuit alleged that they were operating an “illegal” exchange and had a “sham” compliance program, further adding to the legal challenges faced by the company.
Founded in 2017 by Changpeng Zhao and Yi He, the Cayman Islands-based Binance is the world’s leading blockchain ecosystem and cryptocurrency infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. It provides a platform for trading various cryptocurrencies. Binance also provides access to exchange digital currency pairs on the market while maintaining security, and liquidity, enabling a safe and efficient deal with anyone, anytime and anywhere.
