Binance & Coinbase Witness $600Mn In Net Outflows As Investors Lose Trust

Crypto News: In a significant turn of events for the crypto market, two major players, Binance and Coinbase, are grappling with the repercussions of the recent lawsuits filed by the Securities and Exchange Commission (SEC). The legal action has sent shockwaves through the industry, leading to substantial negative net outflows for both exchanges. Blockchain data from Nansen reveals that within the first 24 hours since the lawsuit’s announcement, Binance and Coinbase collectively witnessed close to $600 million in negative net outflows.

Binance & Coinbase Experience Negative Outflows

Within the past 24 hours, Binance’s US arm experienced a net outflow of approximately $123 million across multiple chains, excluding Bitcoin. Notably, assets like MATIC accounted for around $41.6 million, with an additional $19.4 million withdrawn. Meanwhile, Binance Global encountered a net outflow of around $368 million. In a parallel trend, Coinbase faced a net outflow of approximately $105 million.

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As news of the lawsuit gained widespread attention on Tuesday, Binance customers swiftly withdrew approximately $3 billion in assets, while only $1.57 billion was deposited, resulting in a staggering negative net outflow of $1.43 billion. Similarly, the California-based Coinbase experienced users withdrawing approximately $2.64 billion, with only $1.46 billion in deposits, leading to a negative net outflow of $1.18 billion.

Crypto Market Frenzy Over SEC Lawsuits

Following the failure of the fraudulent crypto exchange FTX in November 2022, crypto assets were seen to be redistributed among a number of different exchanges as a result of the event. The Binance exchange emerged as the primary recipient of these inflows. However, following the recent SEC charges against Binance, it appears that a portion of those gains has now been reversed.

The lawsuit filed by the SEC alleges that Binance engaged in the unregistered offer and sale of securities. Additionally, Binance’s former Chief Compliance Officer is accused of willfully violating US regulations, as revealed by private chats obtained by the authority. Furthermore, Binance’s CEO, Changpeng Zhao, faces allegations of improperly mingling investor funds with the company’s own funds.

Conversely, the US watchdog has leveled accusations against Coinbase, claiming that it operated as an unregistered broker, exchange, and clearing agency. These allegations raise concerns about potential violations of financial regulations. However, Coinbase’s CEO, Brian Armstrong, has not been charged in connection with the lawsuit.

Also Read: US Court Interrupts SEC’s Enforcement Against Crypto Exchanges