Binance Users Withdraw Almost $800 Million After SEC Lawsuit

investopedia.com:

Cryptocurrency exchange Binance and its U.S. affiliate were hit with more than $790 million in withdrawals in the 24 hours after the Securities and Exchange Commission (SEC) filed a lawsuit against them.

Reuters first reported on data from Nansen which showed Binance suffered $778.6 million in just a 24-hour period, while Binance.US lost $13 million. Binance’s native BNB token was down over 12% since the lawsuit was announced, while its BUSD stablecoin lost another 1% of its market cap. The dollar-pegged token had seen its market value slump from $18 billion to $5 billion following a previous SEC action.

Coinbase (COIN) found itself to be a target of a separate legal proceeding by the SEC Tuesday morning, and that rival exchange has since lost $57.7 million.The company’s shares lost 16% on Monday.

The SEC filed a lawsuit against Binance, its U.S. affiliate, and founder Changpeng Zhao Monday for violating U.S. securities laws. The lawsuit was a sweeping criticism of the company’s activities, including misleading investors, wash trading, and earning $11.6 billion in trading fees from unregistered operations.

Binance was also accused of an unregistered sale offering of its BNB and BUSD tokens and an unregistered staking service. Similar charges were brought against Coinbase, accusing the firm of «depriving investors» of adequate protections.

The lawsuits are another blow to the cryptocurrency industry and the latest in a series of crackdowns against exchanges by the SEC.

The Bittrex exchange recently announced the closure of its U.S. business and later filed for Chapter 11 protection, citing «regulatory uncertainty» as the key reason. The Kraken exchange was forced to shut down its staking service and pay $30 million to the