The SEC filed lawsuits against the two biggest exchanges in the world this week, Binance on Monday, and Coinbase on Tuesday. In this article, we analyze the money flows on-chain to see how the crypto space is reacting to the news.
Looking at Bitcoin, there has been little movement. Binance saw a drop of 15,000 Bitcoin, but this is negligible compared to the average daily outflows. Coinbase saw a withdrawal of only 0.1% of the total balance.
However, Ethereum withdrawals have been more significant. Coinbase saw 5% of its Ethereum reserves withdrawn, and Binance 3%, likely due to the SEC’s stance on Ethereum’s security status. It sits in a grey area of the law, not fitting into a predetermined category.
The lawsuits have caused some concern in the crypto market, but Bitcoin’s price has rebounded well, trading at $26,800 prior to the lawsuits.
The Binance lawsuit was not unexpected, due to their opaque business model and refusal to be transparent. However, the Coinbase lawsuit presents an intriguing threshold moment for crypto, as the exchange had strived to be compliant and played by the rules. It’s a move that will have huge implications for the industry.
Overall, the market does not seem overly shocked by the news, which is evident from the relatively muted price and withdrawal action. The future of crypto may be uncertain, but the market is not panicking.
