Crypto exchange Binance suffers $2B in outflows as woes pile up - report

Binance has seen net outflows of more than $2B on the ethereum ( ETH-USD ) blockchain over the last seven days as the cryptocurrency exchange continued to get hit with problems, having most recently been sued by the U.S. Commodity Futures Trading Commission, according to a recent Wall Street Journal report that cited crypto data provider Nansen. The CFTC suit, which focused on Binance allegedly operating in the U.S. without legal authority, followed the exchange's announcement last week saying it would end its short-lived zero-fee trading promotion. It also was forced to temporarily suspend spot trading on March 24 due to a software bug. The pace of withdrawals is heightened compared to normal activity and did pick up after the CFTC announcement," Nansen analyst Andrew Thurman told the WSJ . Still, the rush to the exits was more pronounced in February, he added, when the New York Department of Financial Services ordered Paxos, the issuer of Binance-branded Binance USD ( BNB-USD ), to stop minting new BUSD tokens. Binance did not immediately respond to Seeking Alpha's request for comment. BUSD ( BNB-USD ) stablecoin, meantime, experienced over $500M in outflows in the roughly 24 hours that followed the regulator complaint, underscoring traders' worries about the potential implications of the legal battle. The company's decision to bring back fees on spot bitcoin ( BTC-USD ) trading also likely contributed to overall concerns, as most of the trade volume on Binance was zero-fee for the nine months the promotion was live, the newspaper noted Tuesday, citing digital asset data provider Kaiko. More on the Crypto Clampdown Bitcoin Is Benefitting From Banking Sector Fallout Coinbase Wells Notice: What Is At ‘Stake’ Some banks open doors for crypto firms after Silvergate, Signature downfalls - report G-7 said to promote tougher crypto rules amid global banking drama SEC warns of ‘significant’ risk of loss for crypto investors Ex-Terraform Labs CEO Do Kwon arrested in Montenegro after months in hiding