Following the lawsuit by US Securities and Exchange Commission (SEC) against world’s largest crypto exchange Binance, there has been a huge outflow of assets from the exchange, a report by Cointelegraph says.
Data shared by crypto analytic firm Nansen with Cointelegraph, reveals that $778 million worth of assets were withdrawn on the Ethereum blockchain. Binance US also recorded a net outflow of $13 million in assets in the last 24 hours.
The lawsuit also affected Binance’s reserve assets, which lost $1.4 billion within the first hour after announcement of the SEC lawsuit. This represents a total of 2.6% of the exchange’s total reserve of $52.9 billion.
It appears that the lawsuit has scared investors significantly due to the uncertainties surrounding the exchange as a result of the lawsuit, hence the massive outflow of assets.
Although Binance has since responded to the allegations by the SEC, this doesn’t seem to have restored confidence in the embattled company.
Crypto Market Suffers Downtrend
Meanwhile, the entire crypto market has suffered a downward trend since the news of charges filed against Binance by the SEC got out. Bitcoin, the leading cryptocurrency, is currently hovering over $25,000, which is the lowest level it has been in over two months.
Traders Crypto Ed and Crypto Tony believe the asset may be heading to $24,000 before any reasonable bounce since it lost the $26,200 bounce target. This means the rest of the market may be experiencing worse if this prediction plays out.
The SEC is accusing Binance of disregard for federal laws, deception, lack of disclosure, among other charges, making a total of 13 charges. The case is a part of a general crackdown on the crypto market in the US that has been going on for months.
However, the crypto market has since recovered from the crash and even though it is still red, this may not be directly as a result of the lawsuits against crypto giants Binance and Coinbase. Bitcoin currently is above $26,000, which is remarkable.
As against the predictions by the top traders, the top cryptocurrency has reclaimed this key level without dropping to the predicted $24,000 price. Could this be a sign that the bad days are over? Only time can tell, but for now, the effect of Binance’s lawsuit seems to have worn off.
DeFi Sees Boost in Trading Volume
As ouflows hit Binance and Coinbase, DeFi platforms had a good day as their trading volume wen up over 400%. Investors clearly transferred their investments to decentralized exchanges in an effort to avoid whatever could become the impact of SEC crackdown on these top exchanges.
Data from CoinGecko shows that total daily trading volumes on Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum) and PancakeSwap v3 (BSC) increased by more than $792 million in two days. It should be noted that these platforms account for a large chunk of the total DEX trading volume.
Another DEX platform that experienced a surge in activity is Curve, a platform that allows for the trading of stablecoins. The volume increased by 328%, with most of the trading activity focused on trading the U.S. dollar-pegged stablecoins USD Coin.
It may take a while for Binance and Coinbase to regain their trading volumes, especially as the case is still ongoing. However, their victory against the SEC may make all the difference for the crypto space as a whole.
