- A lawsuit from the U.S. Securities and Exchange Commission (SEC) against Binance and its founder has led to $719 million in outflows in 24 hours.
- Major Metaverse tokens such as SAND and MANA, along with Binance’s BNB, witnessed a sharp decline following these allegations.
The cryptocurrency market demonstrated its volatility yet again on Tuesday, as the SEC lawsuit against leading crypto exchange Binance and its founder Changpeng “CZ” Zhao sent ripples throughout the industry. The SEC’s allegations of federal securities law violations resulted in a significant blow to the platform, as shown by a massive $719 million withdrawal across all protocols within a 24-hour span, as per data from Nansen.ai.
The lawsuit announcement, which came during U.S. trading hours, witnessed net outflows peak at $230 million. Despite this considerable withdrawal surge, Nansen data revealed that Binance’s stablecoin balance remained relatively robust. The exchange currently boasts a stablecoin balance slightly north of $8 billion, with a seven-day outflow of about $519 million, accounting for approximately 6% of holdings.
CryptoQuant, a Seoul-based crypto analytics firm, highlighted in a Twitter thread that these withdrawals, although seemingly large, fall within historical norms. Furthermore, it was observed that the exchange with the second-largest holdings, OKX, has a stablecoin balance of $4 billion.
The repercussions of the lawsuit extended beyond Binance as the SEC implicated several other tokens, including Binance’s own BNB, Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI), Algorand (ALGO), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND), Axie Infinity (AXS), and Decentraland (MANA), deeming them securities.
Not surprisingly, the majority of these tokens experienced significant declines, with Metaverse tokens SAND and MANA taking the biggest hits. During the Asian trading day, SAND saw a 13% drop to $0.52, while MANA decreased by 11.6% to $0.45. Additionally, Binance’s native token BNB dropped by 8% to $276.48.
According to CoinGlass, $26 million in positions were liquidated during the Asian trading day, $16.8 million of which were long positions, culminating in a total of $296.5 million liquidations in a 24-hour timeframe, with $271 million being long.
