Binance Outflows Rise to $2 Billion Amidst CFTC Lawsuit

Sahana Kiran
Source – Unsplash

The crypto-verse is still recovering from the failure of several firms throughout 2022. The latest lawsuit by the Commodity Futures Trading Commission [CFTC] against Binance further caused anxiety among the community. This fear was reflected in the increased outflows that the exchange endured over the last few hours.

Binance has experienced high-magnitude outflows since Monday, March 27, 2023. According to analytics source Nansen, Binance has incurred net outflows of $2.1 billion over the previous seven days on the Ethereum network. Binance has a total holding of $63.2 billion in its firm’s openly accessible wallets. Andrew Thurman, an analyst at Nansen further added,

“The pace of withdrawals is heightened compared to normal activity and did pick up after the CFTC announcement.”

In addition to this, Binance USD [BUSD] saw over $500 million in outflows. Additionally, it should be noted that last year on Dec. 13, Binance processed outflows worth $3 billion in just one day. Therefore, the latest numbers did not scare the community.

Will CFTC target other U.S. crypto firms as well?

Currently, the CFTC accuses the exchange of breaking laws relating to futures offerings, illegal off-exchange commodity options, and other violations of its know-your-customer [KYC] or anti-money laundering [AML] procedures. Additionally, the exchange might have also failed to register as a futures commissions merchant, designated contract market, or swap execution facility.

Several believe that the financial watchdog would try to take down similar exchanges in the process. American firms that officials claim collaborated with the exchange to trade cryptocurrencies are being rattled by a key U.S. regulator’s investigation against Binance Holdings Ltd., which has spread well beyond Changpeng Zhao’s business. Urska Velikonja, a professor at Georgetown Law told Bloomberg,

“The risks to US firms are far greater than the risk to Binance. The big risk to them is the ‘lights out’ risk that they lose their license to operate as broker-dealers in the US.”