According to blockchain data, US Securities and Exchange Commission (SEC) lawsuits against Binance, Binance.US and Coinbase have fueled the crypto exchange giants’ deposit exodus of around $4 billion.
Data from blockchain analytics firms Nansen and Glassnode shows that the three exchanges suffered a combined net outflow of $3.1 billion across the Ethereum network and $864 million in Bitcoin (BTC) between Monday and Thursday. The net outflow means that withdrawals exceeded incoming deposits.
The exchanges properly processed withdrawals throughout the week.
The SEC on Monday initially filed a lawsuit against Binance, its US-based company Binance.US, and CEO Changpeng “CZ” Zhao over a series of violations of the federal securities law. Then on Tuesday, the agency sued Coinbase for offering unregistered securities to the public.
The actions unsettled the cryptocurrency market, with tokens the SEC classified as securities in the lawsuits, including Binance’s BNB, Cardano’s ADA and Polygon’s MATIC, falling the most over the week. The SEC is attempting to freeze assets on Binance.US, which caused BTC and Ether (ETH) to trade at a significant premium compared to other platforms for a time as traders and market makers withdrew from the platform.
Crypto traders, terrified by regulatory crackdowns, pulled their funds en masse from exchanges targeted by the SEC.
Binance, the world’s largest crypto exchange by trading volume, saw a net outflow of $2 billion from the Ethereum blockchain in four days, data from Nansen shows. The metric includes ETH and all Ethereum-based tokens.
BTC withdrawals also surpassed deposits by approximately $838 million (31,868 BTC) during this period, according to Glassnode data.
While outflows have been significant this week, according to data from Binance’s crypto wallets, they only account for about 5% of all assets on the exchange.
According to Nansen, Coinbase saw $1 billion in net outflows via Ethereum Monday through Thursday. BTC outflows totaled $25 million per glass node.
According to Nansen data, Binance.US net outflows on Ethereum totaled $75 million. Glassnode does not track the platform.
The US-based exchange said on Friday that users should withdraw USD as soon as possible due to the SEC’s “extremely aggressive and intimidating tactics” against the company. The platform has suspended US dollar deposits and will soon be delisting USD trading pairs while temporarily transitioning to a crypto-only exchange.
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