EThe United States Securities and Exchange Commission (SEC) announced on June 5 that it had sued the largest crypto exchange in the world, Binance, for alleged securities fraud. The announcement triggered a market crash as BNB’s price and others suffered, and users clamored to remove their crypto from the exchange.
$1.5 Billion In Withdrawals In 24 Hours
In the 24 hours following the SEC’s announcement, the volume of withdrawals from Binance saw a surge, as expected. According to data from DeFiLlama, Binance’s net flows climbed quickly but with outflows remaining high, it offset all of the inflows as withdrawals dominated its volume. In total, the exchange saw $1.5 billion in crypto assets leave the exchange in the 24-hour period following the SEC announcement.
On-chain data aggregation firm Nansen also reported on the Binance outflows. The dashboard showed that transfers on the Ethereum blockchain alone on the exchange reached a negative net flow of $778 million on the worldwide platform, while the US arm saw negative net flows of $12,982,964.
Outflows reach $1.5 billion | Source: DeFiLlama
Trading volume on the exchange has also remained high during this time with $6.24 billion in spot volume in the one-day period. Open interest on the trading platform also climbed to $8.8 billion with an average leverage of 0.17x.
Despite the outflows, Binance still remains ahead of the rest of the market with around $50 billion in assets in its reserves. This means that the $1.5 billion in outflows only accounts for less than 3% of the exchange’s total reserves.
Can Binance Recover From Here?
This is not Binance’s first rodeo when it comes to an event triggering massive outflows from the exchange. In fact, the current outflows remain in the realm of ‘normal’ for the exchange which saw over $2 billion in single-day outflows back in December 2022.
Given that the exchange was able to come out of the FTX event unscathed even after investor trust had been eroded greatly, the possibility of it coming out of this unscathed as well remains high given the outflows are lower. CEO Changpeng Zhao has also adopted a new mantra of ‘Ignore FUD’ this year as he has assured users in the past that their funds are safe.
A recent tweet from Zhao seems to be addressing the SEC coming after the exchange. The SEC which has now sued multiple firms looks to be coming after the crypto industry in general and not just one firm. “If you have to pick a fight with everyone, maybe you are the one at fault,” the CEO said.
At the time of writing, Binance’s native token BNB is yet to recover from its Monday crash. The coin is trading at $277.58, down 7.81% in the last 24 hours with losses of 11.30% on the weekly chart.
BNB price drops over 10% in 24 hours | Source: BNBUSD on TradingView.com