Data from prominent analytics platforms such as Nansen and DeFiLlama indicate billions of dollars in crypto assets flowing out of Binance over the past week.
However, Binance CEO Changpeng Zhao, popularly known as CZ, has offered his perspective on the situation, suggesting that the outflows may not be as alarming as they appear.
Analytics platforms like Nansen and DeFiLlama have recorded notable outflows from Binance in the aftermath of the SEC lawsuit.
Nansen reported a net outflow of $2.36 billion from Binance and $123.7 million from Binance.US over the past seven days.
DeFiLlama recorded an even higher figure of $3.35 billion in outflows, while Glassnode data showed a 5.7% decline in Binance’s BTC balance, equivalent to around $1 billion, in the same period.
In a Twitter post, CZ addressed the outflow data, highlighting that some third-party analytics platforms consider changes in assets under management as “outflows.”
CZ argued that this could skew the data, as it would include instances when crypto prices decline. He pointed out that Binance’s outflow in the past 24 hours was approximately $392 million, significantly lower than the $7 billion recorded during the November 2020 FTX collapse.
CZ emphasized that large inflows and outflows are normal during periods of market volatility. He explained that on days of sharp price movements, such as the present, arbitrage traders tend to move substantial funds between exchanges, often exponentially more than on regular trading days.
Since the SEC’s actions against Coinbase and Binance on June 6, the overall cryptocurrency market capitalization has declined by 7%, equivalent to over $80 billion, according to CoinGecko data.