On-chain data shows that Bitcoin is being withdrawn from Binance after the Commodities and Futures Trading Commission (CFTC) sued the exchange earlier this week. However, this has not prompted significant migration from the decentralized finance (DeFi) ecosystem.
Binance Outflows Surge
According to data from IntoTheBlock, BTC withdrawals from Binance have increased by 60% in the past 30 days, with some days in March seeing an average of over $400m in net withdrawals. Juan Pellicer, Senior Researcher at IntoTheBlock, stated that “this signals a strong interest from investors in moving their BTC holdings off the exchange”.
Nansen reported a similar number of net outflows within the previous 24 hours on Monday. Meanwhile, Thanefield Capital showed total stablecoin withdrawals exceeding $1m from Binance within hours before and after the CFTC challenge became public.
The CFTC alleged that Binance illegally serviced many U.S. customers without proper registration, encouraged them to bypass KYC requirements using VPNs, and engaged in market manipulation. However, Changpeng Zhao (CZ), Binance’s CEO, denied these allegations.
Despite the rumors and allegations, traders have not fled to DeFi, according to Pellicer. DeFi allows users to trade directly from their self-custodial wallets, relying on smart contract code to execute transactions. FTX’s collapse in November was followed by an increase in DeFi trading volume, and record sales for hardware wallet providers like Ledger and Trezor. However, the DeFi industry has also proven highly prone to hacks, resulting in users losing billions of dollars last year.
According to CoinGlass, Binance currently holds 540,572 BTC, worth $15.3 billion at writing time. Meanwhile, data from Glassnode shows a balance of 646,709 BTC as of March 30.