- Changpeng Zhao has argued that multiple reports of mass withdrawals from Binance are a misrepresentation in the light of new facts.
- On-chain analytics firms like Nansen and DefiLlama reported net outflows from the digital exchange giant post the SEC lawsuit.
- Binance’s BNB token plummeted 10% in the aftermath of recent developments leaving investors in panic.
Binance has been in the crosshairs of regulators across several jurisdictions with many analysts predicting a dwindling market share for the exchange this year.
Binance CEO Changpeng Zhao stated that the reports on the exchange’s outflows this past week are not a correct reflection of the state of things. Zhao noted that some on-chain analytics firms measure changes in assets under management (AUM) as outflows which include crypto price drops.
Last week, both Nansen and DefiLlama reported billions of outflows from Binance after the Securities and Exchange Commission (SEC) sued the company. According to DefiLlama, $3.35 billion was withdrawn from the exchange in the past week. Glassnode also reported that the exchange’s balance had recorded a sharp decline of $1 billion or around 5.7%.
On the other hand, Nansen reported a net outflow of $2.36 billion, along with $123.7 million withdrawn from Binance US in the past seven days. Despite this, Zhao remains positive about the exchange’s strength. He claimed that the outflow recorded on June 9 is $392 million which is nothing compared to the $7 billion withdrawn from the exchange in the aftermath of the FTX collapse.
He explained that in times of volatility, outflows are pretty expected.
“Some even only measure outflow, net inflows. On a sharp price movement day like today, many arbitrage traders move a lot of funds between exchanges, usually exponentially more than on normal days,” he added.
The effects bite harder
The market has lost gains recorded in previous months since the lawsuit by the SEC against Binance and Coinbase. According to CoinGecko, the market capitalization plunged over $80 billion, about 7%. Due to reduced activity, Binance’s BNB token has plummeted by 10% since the lawsuit.
The harsh effects can also be seen in declining volumes recorded by centralized exchanges (CEX). The decline in CEX volumes started before the lawsuits, as Kaiko reported a 46% decline in April, but things have heightened since then.
DeFi volumes have surged 444% from last week as investors turn to decentralized exchanges (DEX) and other products to protect their assets, with an attack-inclined SEC on the market’s neck.