Binance lost $1.5 billion in 24 hours due to FUD.
The United States Securities and Exchange Commission (SEC) has filed a lawsuit against Binance, the world’s largest crypto exchange, for alleged securities fraud. This announcement caused a market crash, with Binance’s BNB token and others suffering losses, and users rushing to withdraw their crypto from the exchange.
$1.5 Billion In Withdrawals In 24 Hours
In the 24 hours following the SEC’s announcement, the volume of withdrawals from Binance surged, as expected. According to data from DeFiLlama, Binance’s net flows climbed quickly, but with outflows remaining high, it offset all of the inflows as withdrawals dominated its volume. In total, the exchange saw $1.5 billion in crypto assets leave the exchange in the 24-hour period following the SEC announcement.
Nansen, an on-chain data aggregation firm, also reported on Binance’s outflows. The dashboard showed that transfers on the Ethereum blockchain alone on the exchange reached a negative net flow of $778 million on the worldwide platform, while the US arm saw negative net flows of $12,982,964.
- Traders switch to stablecoins amid market shift.
- Kraken investigates funding gateways due to deposit and withdrawal delays.
- SEC sues largest US crypto exchange for securities violations.
Outflows reach $1.5 billion | Source: DeFiLlama
Trading volume on the exchange has remained high during this time, with $6.24 billion in spot volume in the one-day period. Open interest on the trading platform has also climbed to $8.8 billion with an average leverage of 0.17x.
Despite the outflows, Binance still remains ahead of the rest of the market with around $50 billion in assets in its reserves. This means that the $1.5 billion in outflows only accounts for less than 3% of the exchange’s total reserves.
Can Binance Recover From Here?
This is not the first time an event has triggered massive outflows from Binance. In fact, the current outflows remain in the realm of ‘normal’ for the exchange, which saw over $2 billion in single-day outflows back in December 2022.
Given that the exchange was able to come out of the FTX event unscathed, even after investor trust had been greatly eroded, the possibility of it coming out of this unscathed as well remains high, given the outflows are lower. CEO Changpeng Zhao has also adopted a new mantra of ‘Ignore FUD’ this year, as he has assured users in the past that their funds are safe.
A recent tweet from Zhao seems to be addressing the SEC’s lawsuit against the exchange. The SEC, which has now sued multiple firms, appears to be going after the crypto industry in general, not just one firm. “If you have to pick a fight with everyone, maybe you are the one at fault,” the CEO said.
At the time of writing, Binance’s native token BNB has yet to recover from its Monday crash. The coin is trading at $277.58, down 7.81% in the last 24 hours, with losses of 11.30% on the weekly chart.
BNB price drops over 10% in 24 hours | Source: BNBUSD on TradingView.com