Binance Withdrawal On Track to be Largest Since March Crypto Banking Crisis

Blockchain data shows that the exchange endured some $503 million in net outflows on Monday amid SEC charges.

AccessTimeIconJun 5, 2023 at 4:26 p.m. UTC
Updated Jun 6, 2023 at 6:45 p.m. UTC

Cryptocurrency traders are withdrawing funds from crypto exchange Binance at highest level since banking crisis in March, after the U.S. Securities and Exchange Commission (SEC) sued the company and its CEO Changpeng “CZ” Zhao for violating federal securities law on Monday.

Blockchain data shows that the exchange endured some $503 million in net outflows on Monday, according to a Dune Analytics chart by crypto investment product provider 21Shares. Traders have withdrawn more than $1 billion of digital assets during this period, compared to the $546 million in deposits, per the chart.

This is on track to be the largest daily net outflow since at least mid-March, when investors worried about failing crypto-friendly banks destabilizing crypto exchanges, according to data by 21Shares.

Crypto intelligence firm Nansen's data showed that at one point Binance recorded $231 million more withdrawals than deposits within a one-hour period following the news about the lawsuit. The data excludes bitcoin (BTC) transfers.

Binance user deposits and withdrawals over the last hour (Nansen)
Binance user deposits and withdrawals over the last hour (Nansen)

While outflows are rising, this isn't necessarily out of the ordinary yet. In February, Binance weathered some 830 million of net outflows over a 24 hour period as New York state regulators cracked down on Binance-related stablecoin BUSD, CoinDesk reported.

Binance's crypto wallets hold some $55 billion of digital assets, according to Nansen data on exchange reserves.

The outflows came as the SEC lawsuit alleges that Binance, the world’s largest crypto exchange by trading volume, breached multiple federal securities laws. The suit said that Binance offered unregistered crypto securities, including BNB and BUSD tokens, to the general public and allowed for commingling of customer funds.

The SEC also alleges that CZ, the company’s chief executive officer, was “secretly” in control of Binance.US, an ostensibly separate entity operating in the U.S., and a CZ-owned entity had inflated Binance.US’s trading volume.

Edited by Aoyon Ashraf.

UPDATE (Jun. 5, 18:51 UTC): Adds data about daily flows by 21Shares. Updates headline, lead to reflect the size and scope of the daily net outflow.

UPDATE (Jun. 5, 17:35 UTC): Updates headline and data. Adds data about digital assets on Binance. Adds context about prior withdrawals.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.