SEC Lawsuit Triggers Massive Withdrawals from Binance

Data from analytics firm Nansen reveals that investors have withdrawn approximately $790 million from the cryptocurrency exchange Binance and its U.S. affiliate Binance.US within a span of 24 hours. This move comes in the wake of a lawsuit filed by the US Securities and Exchange Commission (SEC) against both entities.

Nansen’s data, as cited by Reuters, indicated that Binance experienced net outflows amounting to $778.6 million in crypto tokens based on the Ethereum blockchain, while Binance.US saw a withdrawal of $13 million.

On Monday, the SEC initiated legal proceedings against Binance, its CEO Changpeng Zhao, and the operators of Binance.US for alleged evasion of US laws through a “web of deception”. The lawsuit entails 13 charges accusing Binance of several fraudulent activities. These include falsely inflating trading volumes, misuse of customer funds, not adequately restricting US customers from their platform, and misinforming investors about its market surveillance measures.

In response to the SEC’s lawsuit, Binance, in a Monday statement, declared its commitment to cooperate fully with the SEC investigation. The firm claimed to have diligently worked to answer the SEC’s inquiries and address their concerns, including attempts to negotiate a settlement. Binance affirmed its intent to vigorously defend its platform.

In the wake of this development, Bitcoin, the world’s largest cryptocurrency, stabilized after experiencing a more than 5% drop the previous day— its worst daily decline since April 19. Bitcoin’s price stood at around $26,061 at the time of writing.The lawsuit has also affected Binance’s native BNB cryptocurrency, which fell to around $279, nearing a three-month low.

Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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