Approximately $1.43 billion has been withdrawn from cryptocurrency exchange Binance and its U.S. subsidiary by investors as of Tuesday 11 a.m. ET (1500 GMT), according to data analytics firm Nansen. This follows a lawsuit filed against both exchanges by a leading U.S. regulator a day earlier. Nansen’s tweet showed Binance experienced a net outflow of $1.34 billion in crypto tokens via the ethereum blockchain, with Binance.US, its American subsidiary, witnessing a net outflow of $70.8 million.
The U.S. Securities and Exchange Commission (SEC) in 13 charges claimed that Binance manipulated its trading volumes, misappropriated customer funds, failed to limit U.S. customer access to its platform, and misled investors regarding its market surveillance measures.
The SEC lawsuit, which reveals a range of practices first highlighted by Reuters through multiple investigations of the exchange, signifies the most substantial move against a crypto firm by the SEC in its widespread clampdown on the industry this year.
In a Monday statement, Binance maintained that it has been actively collaborating with the SEC’s investigation and has “strenuously endeavored to respond to their inquiries and assuage their concerns”, including attempts to negotiate a settlement. The platform declared its intent to “defend our platform with fervor” in a blog post.
After a more than 5% drop the previous day, its most severe daily downturn since April 19, Bitcoin steadied itself. The largest cryptocurrency in the world last traded at $26,300, marking a 3.85% increase on the day.
Tony Sycamore, a market analyst at IG Markets, described the SEC suit as “another setback for the global crypto industry and crypto exchanges”.
Despite a 9.2% drop on Monday, its steepest daily dive since November, Binance’s BNB cryptocurrency, the world’s fourth-largest, rose 1.63% to $282.19.
The SEC complaint marks another in a sequence of legal challenges for Binance. The U.S. Commodity Futures Trading Commission (CFTC) sued the company in March, alleging operation of an “illicit” exchange and a “pretense” compliance program.
