- Binance saw $1.6B in crypto withdrawals following the CFTC lawsuit.
- SEC Chair Gensler calls for more resources to address crypto non-compliance.
- Gensler characterizes the crypto market as the “Wild West” and highlights risks for investors.
According to reports, following a legal action taken by the Commodity Futures Trading Commission (CFTC), investors withdrew up to $1.6 billion in cryptocurrency from Binance, the largest crypto exchange in the world.
The CEO and former top compliance executive of Binance, along with the crypto exchange itself, were sued by the US CFTC, which accused them of running an “illegal” exchange and having a “sham” compliance program.
Blockchain data tracker Nansen reported that Binance saw a total of $1.6 billion in withdrawals and $852 million in the past 24 hours following the CFTC lawsuit, which is a significant increase from the daily average of $385 million over the last two weeks.
While the outflows were higher than normal, Nansen research analyst Martin Lee noted that they were still lower than the $3 billion withdrawn on December 13, 2021, when investors became concerned about the status of Binance’s reserves.
Meanwhile, in a recent House Appropriations Committee hearing, the Chair of the Securities and Exchange Commission (SEC), Gary Gensler, emphasized the need for increased resources to tackle the rising problem of non-compliance in the cryptocurrency market.
Gary Gensler acknowledged that the Securities and Exchange Commission (SEC) is currently “stretched thin” when it comes to investigating emerging issues in the cryptocurrency market. While the agency has already increased resources in this area, Gensler emphasized that more resources could be allocated more effectively to combat non-compliance.
Additionally, Gary Gensler characterized the current state of the cryptocurrency markets as the “Wild West” during his testimony. He highlighted that non-compliance is widespread and investors’ assets are vulnerable to significant risks in a speculative asset class. Gensler emphasized the importance of the SEC growing in tandem with the expansion and increased complexity of capital markets, to match the capabilities of bad actors.
