Binance’s BUSD stablecoin has suffered nearly $500 million in outflows over the past 24 hours.
The significant outflow came after the U.S. CFTC filed a lawsuit against the crypto exchange and its CEO.
Binance’s customers have withdrawn over $800 million from the exchange over the past 30 hours.
The Commodities and Futures Trading Commission’s (CFTC) lawsuit against Binance has had a significant impact on the cryptocurrencies associated with the world’s largest crypto exchange. After leading to a considerable loss in the value of BNB, the lawsuit prompted investors of the BUSD stablecoin to lose confidence, leading to outflows totaling half a billion dollars.
Impact on Binance USD was comparatively small
According to data from CryptoQuant, the BUSD stablecoin has seen approximately $500 million in outflows over the past 24 hours, which is roughly when Binance was hit with the CFTC lawsuit. The impact of the lawsuit on the stablecoin has been limited compared to the $2 billion in outflow that was witnessed last month after the New York Department of Financial Services (NYDFS) ordered its issuer Paxos to stop mining new BUSD.
Hochan Chung, CryptoQuant’s head of marketing told Coindesk that one possible reason for the limited impact may be Binance’s transition from BUSD to alternative stablecoins like TrueUSD (TUSD) or USD Coin (USDC). The crypto exchange ended zero-fee trading for crypto tokens that were trading against BUSD on 22 March. The BUSD-listed trading pairs were subsequently moved to TUSD-listed pairs.
Also, the changes in Binance’s exchange reserves of [BTC], [ETH], and other stablecoins are not notably significant. Only the BNB price has been damaged from the issue.”
Hochan Chung, CryptoQuant
BNB tanked more than 7% in the immediate aftermath of the CFTC lawsuit and sank as low as $306 before recovering to $310. Binance’s customers have withdrawn over $800 million from the exchange over the past 30 hours. Interestingly, the majority of these funds were pulled just hours before the CFTC unveiled charges against the exchange. Data compiled by on-chain analytics firm Nansen revealed that the crypto exchange saw net outflows totaling $852 million.
Thanefield Capital’s research found that in the hours leading up to the CFTC’s indictment, large on-chain movements were witnessed. A series of massive stablecoin withdrawals took place across several centralized crypto exchanges including Coinbase and Kraken. Approximately $1.5 billion in stablecoins were withdrawn.