DeFi Trading Volume Pumps 444% Following SEC Crackdown on Coinbase and Binance
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Over the past 48 hours, decentralized exchanges have experienced a substantial increase of almost $800 million in their daily trading volumes.
This can be attributed to the recent actions taken by the US Securities and Exchange Commission (SEC) against Binance and Coinbase exchanges.
DEX Volumes Surge as Binance and Coinbase Face Crackdown by SEC
Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum), and PancakeSwap v3 (BSC), which are the top three decentralized exchanges (DEX), have recorded a total of 444% surge in their average daily trading volume in the past 48 hours.
This percentage figure was obtained from CoinGecko aggregated data for the top 3 decentralized exchanges.
The data covering Monday and Wednesday shows a significant increase of over $792 million in the total trading volume on Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum), and PancakeSwap v3 (BSC) over the stated period.
This significant spike in DEX daily trading volume indicates that crypto investors are shocked and confused by the recent legal actions taken by the United States securities regulator (SEC) against Binance and Coinbase exchanges.
On June 5, Binance.US confirmed in a long Twitter post that the Securities and Exchange Commission (SEC) filed civil claims against the firm.
In the tweet, the company described the SEC lawsuit as “baseless” and said they intend to defend themselves vigorously.
Today, the SEC filed civil claims against https://t.co/AZwoBOgsqS in what is the latest example of regulation by enforcement under the current Commission. To be clear, we believe the lawsuit is baseless and we intend to defend ourselves vigorously. However, we want to address…
— Binance.US 🇺🇸 (@BinanceUS) June 5, 2023
On the same day, the global Binance Twitter handle also posted a link to an article on their website as the official response to the recent SEC complaint and lawsuit against Binance.US.
Our response to the SEC’s complaint.https://t.co/mgXxGTKr67
— Binance (@binance) June 5, 2023
Meanwhile, On June 6, Bloomberg posted a report on Twitter that SEC sued Coinbase in a federal court in New York for breaking the US securities rules.
BREAKING: SEC sues Coinbase in federal court in New York, alleging the crypto firm broke US securities rules https://t.co/QtpDZInIdl pic.twitter.com/mWOCn3nwFr
— Bloomberg (@business) June 6, 2023
Later the same day, the co-founder and CEO of Coinbase also posted a long tweet confirming that SEC had filed a complaint against the crypto exchange.
He stated that the company is “proud” to represent the crypto industry in court to give some clarification on crypto rules.
Regarding the SEC complaint against us today, we’re proud to represent the industry in court to finally get some clarity around crypto rules.
Remember:
1. The SEC reviewed our business and allowed us to become a public company in 2021.
2. There is no path to “come in and…— Brian Armstrong 🛡️ (@brian_armstrong) June 6, 2023
Brian also mentioned in the Tweet that the SEC allowed Coinbase to go public in 2021 after reviewing their business.
Binance Records Negative Netflow Amidst SEC Crackdown
Amidst the recent SEC crackdown and lawsuit issue against Binance and Coinbase, a shocking $778.6 million negative Ethereum Netflow has been recorded on the Binance platform in the last 24 hours.
This data was posted on June 6 on Twitter by Nansen, a blockchain data and research organization.
According to the post, Binance recorded a net inflow of $871.7 million for Ethereum but a net outflow of $1.65 billion, resulting in a negative net flow of $778.6 million.
Netflow to Binance over the past 24 hours is $778.6M negative on Ethereum – $871.7M in and $1.65B out
Over the past hour, netflow on Ethereum continues to be negative at $35.7M on Ethereum – $14.8M in and $50.5M out
Track it here https://t.co/nwTgpXWhZY and filter for “Binance” pic.twitter.com/jnNAN0QKVy
— Nansen 🧭 (@nansen_ai) June 6, 2023
In another Twitter post, Nansen claimed that over $3 billion had been withdrawn by Binance users over the past 24 hours across multiple chains since the SEC lawsuit announcement.
His tweet also stated that the significant withdrawals by Binance users have resulted in a $1.43 billion negative Netflow for multichain tokens.
It’s been 24 hours since the SEC sued @binance. Binance users have withdrawn over $3B across multiple chains since the announcement, resulting in $1.43B negative netflow as of 3pm UTC today
But what does this all mean?
We’ll show what you need to see using on-chain data… pic.twitter.com/2AcAc2OrW0
— Nansen 🧭 (@nansen_ai) June 6, 2023
While explaining the impact of the SEC crackdown on Binance, Nansen mentioned that the negative netflow simply means that Binance has witnessed more withdrawals than deposits.
Nansen also stressed that this is not the first time Binance will witness such large withdrawals within 24 hours.
An example of December 2022 was given when Binance records show a net outflow of over $2 billion when insolvency created panic in the crypto market.