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Binance US Affiliate Suffers Huge Net Outflows of $790 Million in Just 24 Hours

Binance US Affiliate Suffers Huge Net Outflows of $790 Million in Just 24 Hours

Binance, a cryptocurrency exchange, and its US affiliate have witnessed a withdrawal of around $790 million over the previous 24 hours. This occurrence comes in the wake of lawsuits filed by the US Securities and Exchange Commission (SEC) against both exchanges. 

The SEC has accused Binance of engaging in trading volume manipulation, misusing customer funds, failing to restrict US-based customers, and violating anti-money laundering regulations. Moreover, the agency has alleged that Binance has flouted its obligation to register with the SEC as an exchange that offers securities.

Significance of this Recent Outflows 

Recent outflows suggest that investors are concerned about the regulatory scrutiny faced by exchanges like Binance and its US affiliate. Binance has faced regulatory hurdles in multiple countries, including Japan, Thailand, and the UK, and has been banned from operating in China. Furthermore, the exchange has been criticized for its lack of transparency and alleged involvement in money laundering and other illicit activities.

Binance has refuted the SEC’s accusations and declared its intention to contest the charges in a legal battle. The exchange has reiterated its dedication to complying with regulatory requirements and has allocated resources to build a strong compliance infrastructure. Furthermore, Binance has informed its users of its choice to halt the offering of futures and derivatives products in Europe to comply with regulatory obligations.

Also read: Rosbank Spearheads Cryptocurrency Option for International Transactions in Russia

Binance Response to SEC Allegations 

Binance made an announcement on Monday, revealing their collaboration with the SEC’s investigations. The company declared that they have been exerting substantial efforts to furnish the SEC with satisfactory responses to their inquiries and to settle their concerns by striving to achieve a mutually beneficial agreement. Additionally, the exchange expressed their unwavering commitment to vigorously defend their platform, as stated in their blog.

This current outflow of money leaving Binance and its US-based counterpart is likely to increase concerns about the supervision of the cryptocurrency industry. Governments worldwide are facing difficulties in creating effective rules for cryptocurrencies, which are commonly used for illicit activities such as evading taxes and laundering money.

 The Securities and Exchange Commission’s recent legal action against Binance is a clear sign of regulators clamping down on exchanges that violate securities laws and other regulations. As the cryptocurrency field continues to grow and evolve, it is likely that regulators will have a greater impact in shaping its future direction.

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