SEC Lawsuit: Binance and Coinbase Trigger Massive Withdrawals

• The SEC has recently filed lawsuits against Binance and Coinbase, which has led to a large number of withdrawals across multiple chains.
• An analysis by Nansen.ai revealed that Binance experienced over $3 billion in withdrawals in the 24 hours following the lawsuit, resulting in a negative net flow of $1.43 billion.
•institutional investors such as Cumberland and Brevan Howard Digital were among the top three wallets when it came to net withdrawals, indicating potential concerns over regulatory scrutiny.

SEC Lawsuits Against Binance and Coinbase

The Securities and Exchange Commission (SEC) recently filed lawsuits against two major cryptocurrency exchanges – Binance and Coinbase – which triggered massive withdrawals across multiple chains. Blockchain data company Nansen.ai provided insight into the aftermath of this regulatory storm with an analysis on user behaviour following the lawsuit news.

Binance: Mass Withdrawals

In the 24 hours since the SEC sued Binance, users have withdrawn over $3 billion from their accounts resulting in a negative netflow of $1.43 billion as of 3 pm UTC on June 6th 2023. This signifies a significant shift in user behavior away from the platform due to rising regulatory pressure. Despite this substantial outflow, Binance still holds over $54 billion across its known wallets with Ethereum being its most liquid asset at around $17 billion or 10% of total funds held across known wallets.

Comparing Withdrawals Across Platforms

Comparatively, Coinbase experienced a net withdrawal amounting to around $105 million while Binance witnessed an outflow of approximately $491 million during the same time period following news about their respective SEC lawsuits However these numbers pale in comparison to the mass exodus that occurred when Binance was first sued by the SEC earlier this year, indicating user trust may be returning back to both platforms slowly but surely..

Institutional Investors Increasingly Concerned

Interestingly enough, amongst those withdrawing funds from both platforms were institutional investors such as Cumberland and Brevan Howard Digital who held three of the top five spots when it came to net withdrawals amongst all users during this period.. This could suggest that even institutional players are increasingly concerned about regulatory oversight within this space making them more wary about investing large amounts until further clarity is provided by authorities regarding cryptocurrency investments going forward..

Conclusion

The recent SEC lawsuits against leading crypto platforms like Binance and Coinbase have undoubtedly caused disruption amongst users who have withdrawn billions as a result but this appears not to be as severe as what we saw earlier this year when similar events took place.. Institutional investors also appear increasingly concerned about further regulations affecting their investments prompting them to reduce exposure until further clarification is given by authorities regarding cryptocurrency investments going forward..