- The US Securities and Exchange Commission’s legal action against Binance and Coinbase sparks massive withdrawals from both exchanges.
- The market faces a dip as prominent cryptocurrencies, including Binance Coin, Solana, and Cardano, see declining values.
- Despite regulatory challenges, Binance and Coinbase efficiently processed substantial outflows without any significant delays.
Following the legal proceedings initiated by the US Securities and Exchange Commission (SEC) against Binance, its US arm Binance.US, and their head, Changpeng Zhao, often referred to as “CZ,” for supposedly violating federal securities law, the tremors are beginning to surface. Adding fuel to the fire, the SEC expanded its litigation scope to include Coinbase, charging them with the alleged operation of unregistered securities.
This news has cast a heavy shadow across the cryptocurrency domain, causing jitters among investors. Many are worried about the SEC’s decision to categorize several cryptocurrencies traded on these platforms as securities instead of digital currencies. This has resulted in notable cryptos like Binance Coin, Solana, and Cardano experiencing a sharp downfall in their market value.
The intensity of the commotion is brought to light by market intelligence derived from blockchain analysis firms Nansen and Glassnode. From Monday through Thursday, these firms observed a mass exodus of more than $4 billion. To break it down, Ethereum-centric transactions experienced a $3.1 billion journey, while Bitcoin saw an $864 million outflow.
Binance, which holds the crown for the largest cryptocurrency exchange in terms of trading volume, suffered a colossal Ethereum-based exodus of $2 billion within four days. This accounts for all Ethereum-supported tokens, inclusive of ETH itself. Glassnode’s insights also unveil an excess of Bitcoin withdrawals over deposits, totaling around 31,868 BTC. Binance’s withdrawals hit a new high since December on Wednesday, with 13,953 BTC being withdrawn.
Despite the magnitude of these outflows, they constitute just around 5% of all assets on Binance, as per the data from the exchange’s crypto wallet. On a similar note, Binance.US saw $75 million in outflows via the Ethereum network, according to Nansen. Sadly, Glassnode does not track this exchange, making it challenging to measure Bitcoin outflows. Binance.US has been hit hard by the SEC’s stringent actions, including an asset freeze order.
Coinbase also faced the music, with Ethereum network outflows touching $1 billion from Monday to Thursday, as recorded by Nansen. Glassnode’s data points to Coinbase experiencing Bitcoin outflows to the tune of $25 million. Yet, amid these regulatory tempests, both exchanges displayed their grit by successfully handling these significant withdrawals without any notable delays.
Crypto’s Resilience Beyond Major Exchange Shutdowns
Binance and Coinbase are giants in the cryptocurrency trading platform competition, with the latter garnering significant influence in the American market. They command a pivotal position in the crypto sphere, offering a stage for buying, trading, and selling an array of cryptocurrencies.
Yet, the inherent decentralization and resilience of the crypto market insinuate that even the cessation of these key players wouldn’t trigger the collapse of crypto. The market is replete with alternative trading platforms, and the void left could even spur the birth of fresh contenders.
The underlying technology powering cryptocurrencies – the blockchain, has already exhibited its utility beyond the confines of finance. Regardless of the destiny of specific exchanges, this technology’s trajectory is on an upswing, set to evolve and expand persistently.
