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Withdrawals from Coinbase experienced a significant surge on Monday and Tuesday following the U.S. Securities and Exchange Commission's (SEC) lawsuit against the crypto exchange, which was filed just one day after a similar lawsuit was filed against its rival, Binance.
Nansen, a prominent crypto intelligence firm, has revealed compelling insights into Coinbase's recent activities. Their blockchain data demonstrates that over a span of 24 hours, net outflows from Coinbase amounted to a substantial $600 million. Astoundingly, traders withdrew a whopping $1.38 billion worth of cryptocurrencies during this period, whereas deposits accounted for a comparatively modest $771 million, as reported by Nansen. Notably, it's worth mentioning that these figures do not include bitcoin (BTC) transfers.
The outflows occurred when Coinbase, the leading U.S. cryptocurrency exchange, faced a lawsuit from the Securities and Exchange Commission (SEC), the primary securities regulator in the United States. This legal action came just one day after the SEC sued Binance.US and Binance, two other major players in the crypto industry. Furthermore, several state regulators in the U.S. have raised concerns about Coinbase potentially violating the law through its offering of staking rewards to users in the "Earn" program.
Data indicates that traders have engaged in two distinct waves of fund withdrawals from Coinbase. On Monday, shortly after the lawsuit against Binance was announced, there was a swift net outflow of $450 million within the span of an hour, as reported by Nansen. However, the situation eventually stabilized. Subsequently, on Tuesday, following the lawsuit filed against Coinbase, withdrawals surged once again before gradually subsiding. As of the current publication time, Nansen reveals that the net flows for the past hour have turned positive, suggesting a potential reversal in the trend.
The regulatory measures have triggered a substantial increase in withdrawal activity on Binance. On Monday, data compiled by 21Shares revealed that net outflows exceeded $700 million, marking the highest daily withdrawal since February when New York state regulators imposed a suspension on the issuance of the Binance-associated stablecoin BUSD. This trend persisted on Tuesday, as Nansen data reported net outflows surpassing $1.2 billion within the last 24 hours.
The scale of the outflows corresponds to previous turbulent events in the cryptocurrency industry, such as the crypto banking crisis in March and the downfall of Sam Bankman-Fried's FTX exchange towards the end of last year. The latter incident significantly undermined investor trust in centralized exchanges.
Based on real-time blockchain data from Arkham Intelligence, it can be observed that both exchanges are systematically processing withdrawal requests in an orderly fashion.
