Just a day back Watcher Guru reported that Binance USD stablecoin issuer Paxos is under the radar of U.S. regulators for allegedly violating investor protection laws. The SEC is looking to sue the firm for the issuance of BUSD. Alongside, Paxos has been ordered to stop creating more BUSD tokens. On the news of the said development, BUSD dropped down to $0.9998, slightly below the $1 mark.
Read More: Paxos Ordered To Stop Issuing Binance USD Stablecoin
Owing to the pessimistic sentiment, Binance outflows have steeply risen. Citing data from DeFiLlama, Chinese Journalist Colin Wu brought to light that the 24-hour outflow number for Binance stood at $621 million.
Parallelly, data from Dune Analytics revealed that assets worth more than $900 million were removed from Binance in a single day on Feb. 13. Like shown below, the negative net flow reading was hovering at its highest level since Nov. 2022.
Other ripple effects
Furthermore, BUSD’s supply on exchanges has spiked, bringing its current ratio to 58.9%, back to its highest level since Dec. 22, 2022. According to on-chain data platform Santiment,
“These kinds of moves are typically only made when there is an intention for the crowd to dump the asset.”
Well, the gloomy tale does not end here. Binance’s native BNB token has shed more than 8% of its value over the past day. At press time, it was trading below the $290 threshold.
However, its trade volume has substantially risen of late. This indicator usually acts like a double edged sword, for it takes into account both buy and sell transactions. Nevertheless, Santiment revealed that this time investors are more likely steering away from the asset by dumping it. According to its latest report,
“It [BNB] also is seeing a month-high in trading volume as its price has dropped, meaning there is a higher probability of the plummet potentially continuing.”
Also Read: SEC to Sue Paxos for Issuing Binance USD Coin