ETH Users are Withdrawing Funds from Binance.US as the SEC Seeks to Freeze Assets

Updated: 07 June 2023

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Binance.US recently saw a major surge in Ethereum (ETH) outflows as part of the recent conflict with the US Securities and Exchange Commission (SEC).

After the regulator filed a complaint against Binance for mismanagement of user funds, the regulator also decided it would be best to freeze the funds on Binance.US.

However, the SEC first had to request permission for an asset freeze order, which gave Binance.US’ community a small window to withdraw their funds and avoid having them locked up for an unknown period of time.

The exchange’s users jumped on the opportunity, as the SEC’s new move triggered a sense of uncertainty among US-based cryptocurrency users.

Binance.US started seeing major ETH outflows, which shows just how big of an impact regulatory actions can have on user behavior and market dynamics.

Users withdrawing from Binance US.

ETH outflows from Binance US spiked after SEC seeks order to freeze the exchange US assets. pic.twitter.com/hZ1XxFpyFZ

— Julio Moreno (@jjcmoreno) June 6, 2023

The SEC cracks down on Binance

The SEC’s decision came after recent revelations that allegedly, Binance executives were in charge of Binance.US’ bank accounts.

This particularly included accounts with the now-bankrupt Silvergate Bank. According to recent reports, Binance was in control of 5 of these accounts, one of which even contained users’ funds.

Both Binance and Binance.US denied this, but reports claim that the evidence suggests otherwise.

The SEC also believes that the exchange was mixing corporate profits with the funds belonging to the users, which is also against financial regulations.

While the market was already uncertain and trying to recover from a year-long crypto winter, the SEC’s recent hit on major crypto firms, including Binance and Coinbase, has introduced even greater uncertainty.

Traders and investors are keeping a close eye on the situation while trying to assess the potential implications and the impact of these events on the broader crypto industry.

The future of crypto in the US remains uncertain

For now, the SEC has not received the green light to freeze Binance.US’ accounts, so it is still unclear what will happen next.

Whatever happens is likely to further impact the position of Binance.US, and likely the crypto market as a whole.

Binance.US has been a very popular exchange in the US so far, but it is questionable whether it will be able to continue operation or if it will stay in the US.

This, coupled with recent rumors that Coinbase itself might relocate to a more crypto-friendly environment, could mean that crypto users in the US will lose some major platforms, thus limiting their access to cryptocurrencies.

Once again, the SEC made a decision that will heavily impact the local crypto industry.

The regulator still made no effort to try to regulate the industry, but rather, it is trying to dismantle the local crypto market.

Moves like this could potentially even impact the next year’s elections and potentially secure greater support for a pro-Bitcoin presidential candidate, Robert Kennedy.