Following the announcement of the US Commodity Futures Trading Commission (CFTC) indictment against Binance, the largest cryptocurrency exchange, users began withdrawing funds from their accounts, with a total of over $1 billion in cryptocurrency being withdrawn.
The CFTC alleged that Binance was involved in laundering illegal funds, which led to a significant amount of cryptocurrency being withdrawn from the exchange.
Within the twelve hours following the CFTC indictment, approximately $850 million in cryptocurrency was withdrawn from Binance, with an additional $240 million leaving the exchange within an hour of the lawsuit being made public.
According to Nansen analysts, over $400 million was withdrawn from the platform in just one day, following the filing of the CFTC lawsuit. In total, users withdrew over $1 billion in response to the possibility of regulatory action against Binance.
In response to the allegations, Binance CEO Changpeng Zhao stated that the CFTC lawsuit has no basis for claims, and that the exchange does not engage in market manipulation or attempt to make a profit at any cost.
Despite these statements, the significant outflow of cryptocurrency from the exchange highlights the impact that regulatory action can have on the cryptocurrency industry.