Binance United States arm, Binance US has experienced a spike in users withdrawal rate since the Securities and Exchange Commission filed a lawsuit against the crypto giant.
About $80 million was withdrawn from Binance US on Tuesday, June 7, after the platform faced litigation from the regulators according to data from DeFillama. According to reports, the entire value of tokens owned by Binance US on the Ethereum chain is $321.56 million, suggesting that withdrawals amounted to around 24% of the current TVL.
According to the data from DeFillama, on June 5, the firm recorded a withdrawal of 506,855 after it received the lawsuit from the SEC alleging that the company violated federal securities law and exposed investors to risk.
Also, on June 6, the withdrawal skyrocketed to $7.94 million. Subsequently, following the news of the SEC requesting a restraining order to temporarily freeze assets of BAM, Binance US parent company, the users’ withdrawal surged exponentially to over $80 million at press time.
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Nansen, a blockchain data and research firm also tweeted about the withdrawal earlier today. According to the tweet, about $64.5 million was withdrawn from Binance US within an hour. The huge outflow was mainly because of two Polygon (MATIC) withdrawals worth $62 million.
Binance US assures users
The embattled crypto firm Binance US released a statement on June 6, informing users about the motion filed by the SEC seeking a TRO (temporary restraining order) to freeze its corporate assets. In the statement, Binance US assured its users that their “assets remain safe and secure” and that the platform will continue its regular operations regardless of the lawsuit.
Additionally, Binance US described the preliminary injunction by the SEC as “unwarranted.” It also added that the injunction was based more on the SEC obtaining a litigation advantage and not out of concern about the safety of customer assets.
This afternoon, the SEC filed a motion seeking a TRO and preliminary injunction against https://t.co/AZwoBOgsqS attempting to, amongst other things, freeze https://t.co/AZwoBOgsqS corporate assets. User assets remain safe and secure and the platform continues to be fully…
— Binance.US 🇺🇸 (@BinanceUS) June 6, 2023
Furthermore, the company expressed its disappointment in the lawsuit and also looks forward to defending itself in court. However, the assurance from Binance US seems to have little effect as the user’s withdrawal rate continues to spike.