The United States Securities and Exchange Commission’s (SEC) lawsuit against Binance, the world’s largest cryptocurrency exchange, has had a negative impact on the crypto market.
According to data from crypto analytic firm Nansen, Binance saw negative netflows of $778 million on the Ethereum blockchain in the 24 hours following the SEC’s announcement of the lawsuit. This means that more Ethereum tokens were withdrawn from Binance than deposited into the exchange during this period.
The outflow of funds from Binance has also had a negative impact on the price of Bitcoin and other cryptocurrencies. Bitcoin, for example, fell by more than 4% in the 24 hours following the SEC’s announcement.
The SEC’s lawsuit against Binance is the latest in a series of regulatory challenges facing the crypto industry. In March 2023, the Commodity Futures Trading Commission (CFTC) also filed a lawsuit against Binance, alleging that the exchange violated U.S. commodities laws.
The regulatory scrutiny of Binance and other crypto exchanges is likely to continue. This could lead to further outflows of funds from the crypto market and could put downward pressure on the price of cryptocurrencies.
Despite the negative impact of the SEC lawsuit, Binance still holds a healthy reserve of over $8 billion. The exchange has also said that it is committed to complying with all applicable laws and regulations.
