While the lawsuits filed by the SEC against Binance and Coinbase caused panic in the crypto money industry, many investors withdrew their money from the exchanges.
While there were fund outflows from Binance and Coinbase, there were great decreases in Bitcoin and Ethereum reserves of US-based exchanges.
According to the news of The Block, CryptoQuant wrote in its report that BTC and ETH reserves on US-based crypto exchanges fell below 50% due to the ongoing regulatory pressure in the country.
“BTC and ETH reserves of US-based cryptocurrency exchanges have been dethroned by offshore/international exchanges.
Bitcoin reserves of US-based exchanges fell to the lowest level since January 2017.
The dwindling cryptocurrency reserves potentially indicate that users are withdrawing their assets from exchanges for security concerns or to keep their funds in their private wallets.”
Commenting on the lawsuits filed by the SEC, CryptoQuant said, "The US government and regulators make it difficult for US-based crypto businesses to operate. The SEC is not clear on how exchanges will comply with its rules. This is exactly why some exchanges have decided to cease their operations in the US. Some exchanges have announced their new platforms to operate outside of the US." said.
The CryptoQuant report also noted that the market cap of US-based stablecoins has dropped by 35% and has lost $15 billion so far in 2023.
Last week, the SEC sued Binance and Coinbase for allegedly violating securities laws.
*Not investment advice.