Bitcoin is currently trading at a premium of nearly $400 on Binance.US following the recent lawsuit filed by the United States Securities and Exchange Commission (SEC) against the crypto exchange. The price of Bitcoin on Binance.US is approximately $27,190, while on Coinbase, it stands at around $26,800, according to TradingView data. Both Binance.US and Coinbase have been sued by the SEC for allegedly violating U.S. security laws by allowing the trading of cryptocurrencies that the SEC considers unregistered securities.
The premium on Bitcoin’s price on Binance.US suggests that users are attempting to transfer their assets into the leading cryptocurrency for immediate withdrawal, rather than converting them into fiat currency. Wire withdrawals typically take longer, and users may be concerned that the SEC could freeze the exchange’s assets. In fact, the regulator has sought an order to freeze assets, including cryptocurrencies, held by Binance, Binance.US, and their owner, Changpeng ‘CZ’ Zhao, in order to protect customer assets. This recent Bitcoin premium on Binance.US is not an isolated incident. A similar event occurred last month and lasted for several days. During that time, Binance.US faced challenges in finding a banking partner due to the closure of Signature and Silvergate banks. With a high demand for Bitcoin, users on Binance.US sought faster withdrawal times in Bitcoin compared to the US dollar, resulting in a surge in Bitcoin trading and a premium on the exchange.
Binance.US is still experiencing issues with USD deposits and withdrawals, as stated on its website. Certain USD-based payment methods, including Debit Card, Apple Pay, and Google Pay, are temporarily unavailable due to channel switching. This factor may have further contributed to the Bitcoin premium on the exchange. Mikołaj Zakrzowski, a CryptoQuant analyst, believes that market makers leaving Binance.US have reduced liquidity in the exchange’s order book and weakened market depth, leading to the emergence of the premium. He explains that the imbalance in the order book heavily favored buy orders, and Bitcoin’s price followed suit.
The SEC lawsuits against Binance, Binance.US, and Coinbase have resulted in significant withdrawals from these exchanges. Nansen data shows that Binance users have withdrawn over $3 billion, while Coinbase users have withdrawn over $1.2 billion as of the latest update.
