The Commodities Futures Trading Commission (CFTC) filing against Binance represented the culmination of increased regulatory pressure on the crypto industry.
On March 27, the CFTC sued the company, its CEO Changpeng Zhao (CZ), and its compliance lead Samuel Lim for violating commodities regulations in the U.S. The market reacted switftly to the filing, with Bitcoin dropping 5% and sinking to a 10-day low of $26,500.
In the immediate aftermath of the filing, there was tangible fear of contagion. With Paxos faced with a Wells notice for its issuance of BUSD, the exchange was already on thin ice with regulators. A bombshell report from FT further pressured the exchange, alleging it lied about its ties to China.
The fears about a broader market downturn were largely unfounded. Bitcoin cracked $28,000 the day after the filing, regaining its losses from the previous day and creating solid support.
However, rising outflows from Binance worried analysts as many saw it as a sign of the exchange losing its footing on the market.
A recent report from Glassnode dove deep into net coin flows through the exchange, finding that Binance saw the largest net outflow of stablecoins in history at the end of March.

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Author: Andjela Radmilac