Following the US Commodity Futures Trading Commission (CFTC) lawsuit against Binance, the exchange saw a large outflow of funds, with $400m Ethereum and 3,655 bitcoins worth more than $99m withdrawn in 24 hours, according to analytics providers Nansen and Coinglass respectively. The CFTC accused Binance of breaking trading and derivatives regulatory rules, and called for monetary penalties, disgorgement and a future registration ban. Before the indictment, there were reportedly large stablecoin withdrawals across exchanges, totalling almost $1.5bn in 12 hours, with $850m leaving Binance itself. Following the lawsuit, another $240m was withdrawn, according to “An Ape’s Prologue”.
This article originally appeared on news.bitcoin.com
Binance, one of the world’s largest cryptocurrency exchanges, has experienced a significant outflow of Bitcoin (BTC), Ethereum (ETH), and stablecoins following the recent announcement of a lawsuit filed against the platform by the Commodity Futures Trading Commission (CFTC).
According to data from blockchain analytics firm Glassnode, Binance has seen a decline in its net inflow of BTC, ETH, and stablecoins since the news of the lawsuit broke. The exchange saw a net outflow of around 3,000 BTC (valued at over $138 million) in just a few hours.
This sudden outflow of funds from the exchange has been attributed to the uncertainty that the CFTC lawsuit has created. The lawsuit alleges that Binance has been illegally operating a derivatives trading platform on its exchange, allowing US citizens to trade without proper regulation.
This news has caused concern among Binance’s customers, particularly those who are US citizens, as they are now unsure of the legal standing of their funds on the exchange. Many have chosen to withdraw their funds from the exchange in order to minimize their risk.
Binance has responded to the lawsuit by stating that it takes its regulatory obligations very seriously and is committed to working with regulators to ensure compliance. The exchange has also urged its users to comply with relevant laws and regulations in their jurisdiction.
In addition to the CFTC lawsuit, Binance has been facing regulatory pressure from other authorities around the world. The exchange has been banned in several countries over concerns about its lack of regulatory compliance, including the UK, Japan, and Germany.
Despite these challenges, Binance remains one of the largest and most popular cryptocurrency exchanges in the world, with a daily trading volume of around $16 billion. The exchange has also recently launched its own blockchain, Binance Smart Chain, which has seen rapid growth in the DeFi space.
In conclusion, the recent outflow of BTC, ETH, and stablecoins from Binance following the CFTC lawsuit highlights the importance of regulatory compliance in the cryptocurrency industry. As more governments and regulators around the world begin to take a closer look at the industry, it is imperative that exchanges take their regulatory obligations seriously to ensure the safety and security of their users’ funds.
