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<p class="is-style-lead">The SEC&#8217;s recent lawsuit against Binance US heralds a grim phase for bitcoin liquidity. Amid a flurry of allegations, withdrawals, and an aggressive regulatory stance, we examine the tumultuous unfolding events and their far-reaching implications on the crypto market and investor sentiment.</p>



<p>Sitting at the intersection of technology and finance, the <a href="https://crypto.news/market-cap/">crypto market</a> is no stranger to stormy weather. Yet, the recent legal tempest stirred by the (<a href="https://crypto.news/coinbase-chief-legal-officer-faces-congressional-committee-following-sec-charges-against-the-company/">SEC</a>) against Binance US, a subsidiary of the worldwide crypto juggernaut <a href="https://crypto.news/exchanges/binance/">Binance</a>, has plunged the platform into notably rough seas.&nbsp;</p>



<p>The mounting tension following allegations of mishandling customer funds, misleading investors, and breaching securities regulations has catalyzed a notable drop in bitcoin&#8217;s (<a href="https://crypto.news/price/bitcoin/">BTC</a>) bid-and-ask depth on Binance US, signifying an unsettling liquidity crisis.</p>



<p>As the SEC&#8217;s claims reverberate across the crypto world, market-makers have pulled the liquidity plug on Binance US. </p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Nothing to see here&#8230; Binance losing liquidity it seems. <a href="https://twitter.com/hashtag/Binance?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#Binance</a> <a href="https://twitter.com/hashtag/BTC?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#BTC</a> <a href="https://twitter.com/hashtag/ETH?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#ETH</a> <a href="https://twitter.com/hashtag/FSN?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#FSN</a> <a href="https://twitter.com/hashtag/XRP?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#XRP</a> <a href="https://t.co/pUEdSQqkbY" target="_blank">pic.twitter.com/pUEdSQqkbY</a></p>&mdash; InspoCrypto (@InspoCrypto) <a href="https://twitter.com/InspoCrypto/status/1666876305046896660?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 8, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Conor Ryder of Kaiko traced the gradual decay of US liquidity over recent months. He <a href="https://www.bloomberg.com/news/articles/2023-06-08/bitcoin-liquidity-worsens-on-binance-us-following-sec-actions#xj4y7vzkg" data-type="URL" data-id="https://www.bloomberg.com/news/articles/2023-06-08/bitcoin-liquidity-worsens-on-binance-us-following-sec-actions#xj4y7vzkg" target="_blank" rel="noopener">commented</a> that this seems to be the straw that broke the camel’s back for liquidity on Binance US.</p>




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<p>With the bid-ask spread experiencing a stark rise, it is clear that the repercussions of the allegations have created a chasm between immediate sale and purchase prices of Bitcoin.</p>



<h2 class="wp-block-heading" id="strong-record-outflows-from-binance-strong"><strong>Record outflows from Binance</strong></h2>



<p>After these damaging allegations, Binance has faced substantial outflows, recording the eighth-largest net outflow in history—roughly 14,000 Bitcoin. </p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/Binance?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#Binance</a> continues to experience the consequences of <a href="https://twitter.com/hashtag/SEC?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener">#SEC</a> issues.<br><br>The net outflow of Bitcoins from the exchange (-14,000 BTC) marks the 8th largest in recorded history!<br><br>Data by Glassnode <a href="https://t.co/TSXOnmgswb" target="_blank">pic.twitter.com/TSXOnmgswb</a></p>&mdash; Eugene L. (@e_lokast) <a href="https://twitter.com/e_lokast/status/1666832035506266112?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 8, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Despite this, research agency Glassnode offered a ray of hope, suggesting that the outflow&#8217;s impact appears somewhat minimal when juxtaposed against the balance held on Binance exchange addresses.</p>



<p>The crypto market understandably reacted with alarm to the allegations, with bitcoin prices experiencing a slump of approximately 2% over the week, wavering around $26,500 as of June 9.&nbsp;</p>



<p>Meanwhile, ether (<a href="https://crypto.news/price/ethereum/">ETH</a>) has also faltered, dropping more than 2.5 % and now hovers near $1,840.<br><br>As the news broke, Binance&#8217;s proprietary cryptocurrency, BNB, reacted sharply. As of June 9, its trading value stood at $258.69, reflecting a decline of approximately 16% over the week.</p>



<h2 class="wp-block-heading" id="strong-sec-8217-s-broadened-clampdown-on-crypto-strong"><strong>SEC&#8217;s broadened clampdown on crypto</strong></h2>



<p>The Binance ordeal is just one part of a larger narrative in the SEC&#8217;s intensifying crackdown on crypto entities. However, this recent legal face-off reflects the overall global trend toward a stricter regulatory approach to cryptocurrencies. </p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">The SEC will likely sue Crypto .com<br><br>they sued Coinbase and Binance for selling securities<br><br>specifically naming Solana, Cardano, Sandbox, Matic, CHZ, BNB, Mana, Algo and more<br><br>crypto .com also sells ALL of these cryptos<br><br>plus they launched their own CRO coin<br>plus they offer… <a href="https://t.co/2nuqd5ljVY" target="_blank">pic.twitter.com/2nuqd5ljVY</a></p>&mdash; Crypto Tea (@CryptoTea_) <a href="https://twitter.com/CryptoTea_/status/1666606658536058881?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 8, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>The crypto world has seen SEC&#8217;s aggressive action before, notably in the FTX exchange and Coinbase case, setting a disconcerting precedent for crypto exchanges and investors alike.</p>



<h2 class="wp-block-heading" id="binance-us-prepares-for-major-changes">Binance US prepares for major changes</h2>



<p>In a surprising move, Binance US announced the suspension of US dollar deposits and alerted customers of an impending pause in fiat (USD) withdrawal channels.&nbsp;</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry. <a href="https://t.co/AZwoBOgsqS" target="_blank">https://t.co/AZwoBOgsqS</a> and our business partners have not been spared in the use of these tactics, which has created… <a href="https://t.co/rlIe6swIoY" target="_blank">pic.twitter.com/rlIe6swIoY</a></p>&mdash; Binance.US 🇺🇸 (@BinanceUS) <a href="https://twitter.com/BinanceUS/status/1666996908651323393?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 9, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>A decision triggered by the SEC&#8217;s aggressive tactics, these modifications are set to transform Binance US into a crypto-only exchange.&nbsp;</p>



<p>Such a shift might send further shockwaves through the market, altering dynamics and challenging the resilience of Binance&#8217;s customer base.</p>



<h2 class="wp-block-heading" id="the-road-ahead">The road ahead</h2>



<p>As Binance US reinvents itself amidst the storm, the rest of the crypto world watches keenly. This saga underscores the need for a more evolved and adaptive regulatory framework in cryptocurrencies. </p>



<p>Ultimately, the course Binance US navigates will significantly impact the crypto industry&#8217;s future landscape.</p>




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            Ripple losing SEC case can affect Coinbase and Binance, lawyer says         </a>
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Bitcoin liquidity impacted on Binance US amid SEC suit

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