JAKARTA - The world's largest cryptocurrency exchange, Binance, is facing serious pressure after a lawsuit filed by the United States Securities and Exchange Commission (SEC).

On-chain data revealed that on June 5, Binance experienced a negative netflow of US$623 million (Rp9.2 trillion), reaching its highest withdrawal rate since the banking crisis in March this year.

However, these figures are still at a historical normal level. Since the beginning of this year, Binance has recorded around USD 1 billion (equivalent to IDR 14.8 trillion) in negative net currents, amid various FUD attacks (Fear, Uncertainty, and Doubt) and rumors about bank runs.

According to a report from blockchain analysis firm Nansen, net flow to Binance turned positive on the cryptocurrency Ethereum this morning. The exchange saw about 75 million US dollars (Rp1.1 trillion) positive net currents in recent hours.

Even so, the SEC's lawsuit against Binance resulted in the original token of the exchange, namely BNB, which fell by about 8 percent in the last 24 hours. At the time of writing, BNB is trading at a price of around 4,500,000. Likewise, Bitcoin and Ethereum also experienced a decline in prices of around 4 percent and 3 percent, respectively.

Binance is currently under intense scrutiny from US regulator, the SEC. In addition to the SEC lawsuit, Binance is also facing investigations from the Department of Justice (DoJ), the Commodity Futures Trading Commission (CFTC), and even the Internal Revenue Service (IRS). The SEC's lawsuit includes 13 charges against the crypto exchange and its founder, Changpeng Zhao, regarding unregistered exchange operations and alleged trade surveillance breaches on the Binance.US platform.

The investigation was carried out revealing that a senior Binance executive secretly controlled Binance.US' finances through five affiliated bank accounts in the United States. In fact, one of the bank's accounts is known to keep American customer funds.

The SEC filed a lawsuit after a Reuters report revealed these findings. The investigation also found that Guangying Chen, a close associate of Changpeng Zhao, controlled accounts at the non-operating Silvergate bank, between 2019 and 2020.

In this tense situation, Binance and other crypto industry stakeholders are expected to face this challenge with a cool head and follow the applicable legal process. Regulational travel for the crypto industry continues to grow, and the steps taken by regulators will be an important influence on the future of the crypto ecosystem.


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