BinanceUS market depth fell 78 percent after a lawsuit from the US Securities and Exchange Commission (SEC).
BinanceUS has seen a staggering 78 percent drop in market depth of the top 25 cryptoassets since the U.S. Securities and Exchange Commission announced its lawsuit against itself, Binance, and CEO Changpeng Zhao. Crypto data firm Kaiko attributed the main reason behind the drop in market depth to the rapid departure of market makers from the platform following the lawsuit, which triggered concerns about liquidity.
CZ Appeals Net Exit Numbers
Market depth is an important metric that shows the liquidity and depth of order books. This metric refers to the volume of buy and sell orders at different price levels. Decreased market depth means less liquidity and potential difficulties for traders who execute orders.
Market makers are very important in providing liquidity by giving buying and selling prices. The sudden departure of these individuals left Binance.US with limited liquidity, making it difficult for investors to execute their orders effectively.
This significant decline is causing concern for investors who rely on strong liquidity to execute their transactions. With the reduced availability of buy and sell orders, traders may face increased slippage and potential difficulties in obtaining desired execution prices. Lack of liquidity can also weaken the overall efficiency of the stock market.
Last week, the SEC sued Binance for allegedly violating US securities laws, and the exchange said it would vigorously defend this case.
According to crypto data provider Nansen, over $2.5 billion has been netted out of Binance in the past seven days. However, Binance CEO Changpeng Zhao disputed these figures.
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