Investors have withdrawn approximately $780 million from the cryptocurrency exchange Binance within the past 24 hours, according to data firm Nansen. This significant outflow of funds follows the recent lawsuit filed by the US Securities and Exchange Commission (SEC) against Binance, which is regarded as the world's largest crypto exchange. During the same period, Binance's US affiliate exchange recorded net outflows totalling $13 million, as reported by Nansen.
The SEC's lawsuit, filed on Monday, June 6, targets Binance, its CEO Changpeng Zhao, and the operator of Binance US, accusing them of orchestrating a "web of deception" to evade US regulations. The SEC has brought forth 13 charges, alleging that Binance engaged in practices such as artificially inflating trading volumes, misusing customer funds, failing to restrict access for US customers, and providing false information to investors about its market surveillance controls.
This legal action represents a significant milestone in the SEC's extensive crackdown on the cryptocurrency industry throughout this year. The lawsuit refers to various investigations into Binance's operations, highlighting multiple questionable practices.
Binance responded to the allegations on Monday, June 5, asserting that it has cooperated with the SEC's investigations and made efforts to address their concerns. The company expressed its intention to vigorously defend its platform and has actively sought a negotiated settlement.
In a blog post, Binance stated, "We have worked hard to answer their questions and address their concerns."
The SEC's complaint adds to Binance's mounting legal troubles. In March, the company faced a lawsuit from the US Commodity Futures Trading Commission (CFTC), which accused Binance of operating an "illegal" exchange and having a "sham" compliance programme.
Binance CEO Changpeng Zhao countered the CFTC claims, characterising them as an "incomplete recitation of facts."
Furthermore, Binance reneged on its plans to acquire FTX, as announced on November 9, triggering a series of events that led to the collapse of Sam Bankman-Fried's crypto empire.
The reversal occurred after Changpeng Zhao revealed a non-binding agreement for Binance to purchase FTX's non-US businesses.
(Edited by : Shoma Bhattacharjee)
First Published: Jun 6, 2023 5:41 PM IST
