Nearly one billion dollars in cryptocurrency reportedly left the wallets of the crypto exchange platform Binance, as the U.S. Commodity Futures Trading Commission (CFTC) indicted Changpeng Zhao, the platform’s CEO, and the platform itself for regulatory violations.
Thanefield Capital’s data research revealed an unprecedented surge in the withdrawal of funds from centralized exchanges a few hours before the Binance CFTC indictment on March 27, 2023. In the 12 hours leading up to the indictment, nearly $1.5 billion was withdrawn from major platforms, including Binance, Kraken, Coinbase, and Bitfinex. Notably, Binance saw the highest outflow, with more than $850 million leaving the crypto exchange.
Moreover, within an hour of the announcement, Binance witnessed a further withdrawal of $240 million. Nansen‘s data reveals that in the last 24 hours, withdrawals from Ethereum-based funds alone have exceeded $400 million.
However, Nansen’s findings indicate that Binance still possesses approximately $63.7 billion in cryptocurrencies based on publicly labelled wallets. According to Glassnode data, this comprises over $2 billion worth of USDT, $17 billion worth of Bitcoin, and $8.1 billion worth of Ether.
According to An Ape’s Prologue, a crypto analyst’s tweet, this massive withdrawal of funds is consistent with the speculations that circulated before the event that something important was taking place.
The CFTC filed a lawsuit against Binance and Changpeng Zhao in the U.S. District Court for the Northern District of Illinois. The Commission has been investigating Binance’s business since 2021 and claims that the company did not comply with its regulatory obligations by failing to register properly with the derivatives regulator.
Meanwhile, in February 2023, Binance acknowledged that it could face regulatory action in the United States and was already cooperating with regulators. According to Binance’s Chief Strategy Officer, Patrick Hillmann, regulatory authorities will ultimately decide whether ongoing investigations will lead to further fines.
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