Massive Withdrawals Hit Binance Following CFTC Lawsuit
Last Updated on 6 November 2023 by CryptoTips.eu
There has been a massive outflow of crypto assets from Binance less than 24 hours after the US Commodities and Futures Trading Commission (CFTC) filed a case against the exchange. This could be as a result of panic created by the lawsuit which seeks to ban Binance’s operations in the country.
My Response to the CFTC Complaint | Binance Blog https://t.co/TadyotM7HN
— CZ 🔶 Binance (@cz_binance) March 27, 2023
On-chain analytics platform Nansen released data that showed a significant withdrawal of different digital assets, including stablecoins. Binance is the largest crypto exchange by trading volume and though it does not directly serve U.S customers, it created a platform for them known as Binance US.
Nearly 4,000 BTC Withdrawn in 24 Hours
The CFTC announced Monday 27 March that it had filed a lawsuit against Binance for “willfull evasion” of federal laws. At least 3,655 BTC have been withdrawn from the exchange since the announcement, possibly to prevent any losses should the exchange shut down operations.
Similarly, the data shows that $400 million worth of Ethereum were withdrawn within the last 24 hours, and over 150 million BUSD have been sold. In fact, $240 million worth of cryptocurrencies were withdrawn from the exchange within one hour of the lawsuit announcement.
It is worthy of note that Binance is the largest holder of BUSD tokens, holding 7.1 billion out of the total 7.84 billion tokens in circulation. It also holds $63.36 billion worth of crypto assets in total at the time the data was released.
Binance Operations at Stake
Binance is facing serious allegations by the CFTC which accuses the exchange of willfully avoiding compliance with federal laws while profiting from trading activities in the country. Defendants in the case include Binance CEO Changpeng Zhao and three other entities.
So Binance is being sued by the CFTC (USA) for basically having a 'secret' in-house trading desk with 300 accounts.
— wolf (@ImNotTheWolf) March 27, 2023
This states that Binance is basically trading against all of their users, with their 'quant' desk using private transactional data.
It seems they also "sold" it… pic.twitter.com/hk6New85Ri
A former head of compliance at Binance, Samuel Lim has also been implicated for “aiding and abetting” compliance avoidance. The commission is seeking to stop Binance’s operations in the U.S, as well as asking for monetary and other penalties and an injunction to prevent further evasion of regulation.
