In short: Following the SEC's announcement of a securities fraud lawsuit against Binance, the largest crypto exchange, users withdrew $1.5 billion in the 24 hours that followed, causing a market crash and a decline in BNB's price. Outflows from the exchange dominated its volume and on-chain data aggregation firm Nansen reported transfers on the Ethereum blockchain reaching a negative net flow of $778 million. Despite this, Binance remains ahead of the rest of the market with $50 billion in assets in its reserves. Binance CEO Changpeng Zhao has adopted a new "Ignore FUD" approach and assures users their funds are safe.
Our quick analysis:
The crypto world was rocked on June 5 with the news that the SEC was suing Binance, the world’s largest crypto exchange, for securities fraud. As a result, BNB’s price and other cryptocurrencies took a hit, and users scrambled to withdraw their assets from the exchange.
Within 24 hours of the announcement, Binance saw a surge in withdrawals, with $1.5 billion in crypto assets leaving the exchange, according to data from DeFiLlama. Nansen also reported that Binance on-chain outflows on Ethereum alone reached over $778 million, with the US arm seeing negative net flows of $12,982,964.
Despite the outflows, Binance still holds around $50 billion in assets, meaning that the $1.5 billion outflow accounts for less than 3% of its total reserves.
But can Binance recover from this setback? The exchange has weathered similar storms in the past, such as the FTX event last year, which saw over $2 billion in outflows in a single day. Binance’s CEO, Changpeng Zhao, has assured users that their funds are safe, adopting a new mantra of “Ignore FUD” this year.
In a recent tweet, Zhao seemed to allude to the SEC coming after the crypto industry in general: “If you have to pick a fight with everyone, maybe you are the one at fault.”
At the time of writing, Binance’s native token (BNB) has yet to fully recover, still down 7.81% in the last 24 hours and 11.30% on the weekly chart.
As the dust settles, only time will tell if Binance can come out swinging from this latest hit.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Our quick analysis:
The crypto world was rocked on June 5 with the news that the SEC was suing Binance, the world’s largest crypto exchange, for securities fraud. As a result, BNB’s price and other cryptocurrencies took a hit, and users scrambled to withdraw their assets from the exchange.
Within 24 hours of the announcement, Binance saw a surge in withdrawals, with $1.5 billion in crypto assets leaving the exchange, according to data from DeFiLlama. Nansen also reported that Binance on-chain outflows on Ethereum alone reached over $778 million, with the US arm seeing negative net flows of $12,982,964.
Despite the outflows, Binance still holds around $50 billion in assets, meaning that the $1.5 billion outflow accounts for less than 3% of its total reserves.
But can Binance recover from this setback? The exchange has weathered similar storms in the past, such as the FTX event last year, which saw over $2 billion in outflows in a single day. Binance’s CEO, Changpeng Zhao, has assured users that their funds are safe, adopting a new mantra of “Ignore FUD” this year.
In a recent tweet, Zhao seemed to allude to the SEC coming after the crypto industry in general: “If you have to pick a fight with everyone, maybe you are the one at fault.”
At the time of writing, Binance’s native token (BNB) has yet to fully recover, still down 7.81% in the last 24 hours and 11.30% on the weekly chart.
As the dust settles, only time will tell if Binance can come out swinging from this latest hit.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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Please, behave!