Binance Records Substantial Net Outflow of 11,380 BTC in the First Day Following SEC Lawsuit

In the wake of the recent Securities and Exchange Commission (SEC) lawsuit announcement, Binance, one of the world’s largest cryptocurrency exchanges, has witnessed notable net outflows of Bitcoin and Ethereum.

While these outflows have surpassed the levels seen during the exchange’s previous encounter with regulatory scrutiny, they remain within historical norms and are relatively small compared to Binance’s reserves.

Bitcoin Netflows

Following the SEC lawsuit, Binance experienced a net outflow of 11,380 BTC in the first day alone. This figure exceeds the outflows observed during the exchange’s encounter with the Commodity Futures Trading Commission (CFTC) in March 2023 when meaningful net outflows were not recorded.

Source: CryptoQuant

However, it is considerably lower than the net outflows of 40,353 BTC witnessed on December 12, 2022, during a period of regulatory uncertainty and fear, colloquially known as “regulatory FUD.” Notably, between December 10 and December 16, Binance witnessed net outflows of 78,744 BTC.

It is essential to highlight that while the net outflows of Bitcoin are significant, they remain relatively small in relation to the exchange’s overall reserves. Binance currently holds 601,000 BTC in reserves, slightly below the record high of 635,000 BTC recorded on April 30.

Ethereum Netflows

Binance also experienced net outflows of Ethereum (ETH) following the SEC lawsuit, totaling 91,223 ETH. The highest daily net outflow of Ethereum occurred on December 12, 2022, during the aforementioned “regulatory FUD” period when 278,000 ETH was withdrawn from the exchange. In comparison, after the CFTC lawsuit was announced, Binance witnessed a daily net outflow of 76,146 ETH.

Source: CryptoQuant

Similar to Bitcoin, net outflows of Ethereum have remained within historical ranges relative to Binance’s reserves. Currently, the exchange holds approximately 4.34 million ETH in reserves.

Stablecoin Netflows

Binance experienced net outflows of approximately $443 million in stablecoins following the SEC lawsuit. However, it is important to note that total net outflows of stablecoins have been much higher in the past, particularly during the period between February and March 2023 when Paxos announced the discontinuation of minting Binance’s stablecoin, BUSD, following its own legal battle with the New York Department of Financial Services (NYDFS).

Source: CryptoQuant

Binance’s Total Reserves

Despite the recent net outflows, Binance’s reserves of Bitcoin and Ethereum remain at high levels. As of now, the exchange holds 601,000 BTC and 4.34 million ETH in reserves. However, the reserves of stablecoins, particularly BUSD, have seen a significant decrease from $24.5 billion in December 2022 to $8.2 billion at present. This decline has been primarily driven by a decrease in BUSD reserves, which accelerated after Paxos’ announcement of discontinuing BUSD minting.

In conclusion, Binance has experienced notable net outflows of Bitcoin, Ethereum, and stablecoins following the SEC lawsuit announcement. However, these outflows are smaller than those witnessed during previous periods of “regulatory FUD.”

Despite the withdrawals, Binance’s reserves of Bitcoin and Ethereum remain robust, demonstrating the exchange’s ability to weather regulatory challenges. As the situation unfolds, market participants will closely monitor Binance’s response and the impact on its overall operations.

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