SEC crackdown on BinSEC crackdown on Binance and Coinbase surge DeFi trading volumes 444%ance and Coinbase surge DeFi trading volumes 444%
In the past 48 hours, decentralized exchanges (DEX) have experienced a significant increase in total daily trading volumes, with a surge of nearly $800 million. This surge was driven by the recent legal actions taken by the United States securities regulator against major cryptocurrency exchanges Coinbase and Binance, causing crypto investors to seek alternatives.
Based on data from CoinGecko, the median trading volume across the top three DEXs, namely Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum), and PancakeSwap v3 (BSC), witnessed a remarkable 444% jump in the past two days. These three exchanges alone accounted for 53% of the total DEX trading volume over the last 24 hours, with an increase of more than $792 million between June 5 and June 7.
Another notable development was the trading volume on Curve, a DEX facilitating stablecoin trading, which experienced a significant spike of 328%. Currently, the majority of trading activity on Curve involves the U.S. dollar-pegged stablecoins USD Coin and Tether.
During the recent memecoin frenzy in May, trading volumes on DEXs briefly surpassed those of Coinbase. This surge was primarily driven by crypto investors flocking to Uniswap and other decentralized protocols to purchase tokens like Pepe (PEPE) and Turbo (TURBO), which were not listed on major centralized exchanges.
As DEX volumes soared, Binance experienced substantial net outflows, reaching an astonishing $778 million. However, it is important to note that the current net outflows are still significantly lower than the exchange's total reserve, as Binance currently holds a stablecoin balance of over $8 billion.
These market dynamics unfold in the midst of a series of legal actions by the Securities and Exchange Commission (SEC) against crypto exchanges. On June 6, Coinbase was sued by the SEC, alleging that it offered unregistered securities and acted as an unregistered securities broker, among other charges.
A day prior, on June 5, the SEC filed a lawsuit against Binance, Binance.US, and Binance CEO Changpeng Zhao (CZ), making similar allegations. The SEC claimed that Binance had failed to register as a securities exchange and was thus operating illegally in the U.S. Changpeng Zhao was sued as a "controlling person" in the charges.