The U.S. Securities and Exchange Commission (SEC) lawsuits against Coinbase and Binance have prompted a wave of withdrawals from the two crypto exchanges.
According to blockchain data firm Nansen, Coinbase saw net outflows of $600 million over a 24-hour period on Monday and Tuesday. Binance saw even larger outflows, with net outflows of $700 million on Monday and $1.2 billion on Tuesday.
The outflows come as the SEC is alleging that Coinbase and Binance have violated federal securities regulations. Coinbase is accused of offering unregistered securities, while Binance is accused of failing to register as a securities exchange.
The lawsuits have raised concerns among investors about the regulatory environment for crypto exchanges. As a result, many investors are choosing to withdraw their funds from these exchanges.
The outflows from Coinbase and Binance are a sign that the crypto industry is still in its early stages of development.
As the industry matures, it is likely that regulators will provide more clarity on how crypto exchanges should operate. This will help to attract more institutional investors to the space and could lead to a sustained rally in crypto prices.