The SEC lawsuit against Binance led to outflows of over $750 million on Ethereum in the past 24 hours, with outflows still exceeding inflows.
The United States Securities and Exchange Commission’s (SEC) lawsuit against Binance — accusing the crypto exchange of violating various securities laws — has directly impacted the crypto market and the exchange’s balance sheet.
According to data from crypto analytic firm Nansen, Binance saw negative netflows of over $778 million on the Ethereum blockchain, with $871 million of inflows dominated by $1.6 billion flowing out of the exchange.
As of 9.15 am UTC at the time of writing, in the 24 hours since the SEC charges, Ethereum-based tokens have seen negative netflows, with $14.8 million of assets flowing in and $50.5 million worth of assets flowing out of the exchange in the past hour alone.
Binance’s reserve assets had a net outflow of approximately $1.4 billion in the first hour after news broke of the SEC’s charges, amounting to 2.6% of its total reserve assets of $52.9 billion.
The outflow of funds from Binance across all protocols has reached $999 million in the past 24 hours. Deteriorating confidence in Binance, on the other hand, has helped OKX become a preferred destination for traders, with the exchange registering a significant inflow of over $190 million.
Compared with the Commodity Futures Trading Commission’s lawsuit against Binance in March, the recent net outflow is substantial but smaller. The same goes for December 2022, when Binance experienced large outflows in the wake of the FTX collapse. Additionally, the net outflows are still lower than the exchange’s reserve. The crypto exchange holds a healthy stablecoin balance of over $8 billion.
Aside from outflows on Ethereum, Binance also saw the largest outflow of Bitcoin (BTC) from the platform since the FTX collapse. Over 20,000 BTC were withdrawn from the exchange in the last 24 hours.
Another on-chain analysis shared by CryptoQuant revealed that the total amount of user transactions to withdraw funds spiked after the SEC lawsuit announcement. However, they still hadn’t surpassed the levels seen in December 2022 when self-custody became increasingly popular in the crypto market.
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— CryptoQuant.com (@cryptoquant_com) June 6, 2023
The total amount of user transactions to withdraw funds (#Bitcoin, #Ethereum, and #Stablecoins) has spiked after the SEC lawsuit announcement, but they are still within historical normal levels. pic.twitter.com/fHKMmKAyWI
Market pundits predicted that the significant surge in the withdrawals of assets from the crypto exchange reflects the declining trust of investors in centralized exchanges.
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