Investors Flee Binance, Pull Out $2Billion After CFTC Lawsuit

Crypto analytics firm Nansen reports that investors have pulled out $2bn (£1.62bn) from Binance over the past week.

The massive outflux comes as the world’s largest crypto exchange suffered an enforcement action from the US Commodity Futures Trading Commission (CTFC) against the crypto exchange and its founder Changpeng ‘CZ’ Zhao on Monday.

The CFTC claims Binance failed to meet its regulatory obligations by not properly registering with the derivatives regulator.

The CFTC classifies bitcoin (BTC-USD), Ethereum (ETH-USD), and litecoin (LTC-USD) as commodities and has accused Binance of conducting unregistered derivative trading with these digital assets.

The CFTC also accuses Binance founder Changpeng “CZ” Zhao of encouraging Americans to “evade compliance controls” by the US regulator.

Zhao has dismissed the CFTC’s accusations claiming that Binance "never engages in trading for a profit or ‘manipulating’ the market in any situation."

Yet, since the beginning of the week over $2bn has left the exchange, the majority of the withdrawals being made on the Ethereum blockchain.

According to Nansen, the rate of withdrawals from Binance increased in the run-up to, and following the CFTC announcement.

In the 12 hours leading up to the enforcement action announcement from the CFTC,

Binance saw over $850m worth of cryptocurrencies removed from the exchange in the 12 hours leading up to the CFTC’s enforcement action.

Data from Nansen also indicates that just one hour after the announcement, an additional $240m was withdrawn.


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