The sudden crackdown by the SEC on top crypto exchanges like Coinbase and Binance have caused trading volume on DEX(decentralized exchanges) to skyrocket over 444%. Uniswap V3, Pancakeswap V3, and Arbitrum lead the surge with a $792 million increase in trading volume from June 5 to June 7, capturing 53% of total DEX trading.
The frenzy extended beyond these platforms, with Curve, a DEX specializing in stablecoin trading, experiencing a remarkable 328% spike in trading volume. Notably, the bulk of trading activity on Curve revolved around the U.S. Dollar-pegged stablecoins, USD Coin (USDC) and Tether (USDT).
During the peak of the memecoin frenzy in May, trading volumes on DEXs momentarily surpassed those of Coinbase, one of the largest centralized exchanges. Crypto investors flocked to decentralized protocols like Uniswap to purchase tokens such as Pepe (PEPE) and Turbo (TURBO), as these memecoins were not listed on major centralized exchanges.
Simultaneously, as DEX volumes surged, Binance experienced significant net outflows, reaching an astonishing $778 million. It is worth noting that despite the substantial outflows, Binance’s current net outflows remain considerably lower than the exchange’s total reserve, which exceeds $8 billion in stablecoin balances.
This market frenzy unfolded amidst a series of legal actions taken by the United States Securities and Exchange Commission (SEC) against various crypto exchanges. On June 6, Coinbase was sued by the SEC, alleging the exchange’s involvement in offering unregistered securities and acting as an unregistered securities broker, among other charges.
A day prior, on June 5, the SEC also filed a lawsuit against Binance, Binance.US, and Binance CEO Changpeng Zhao (CZ) with similar allegations. The SEC accused Binance of operating as an illegal securities exchange in the United States, citing a failure to register accordingly. Additionally, Changpeng Zhao was named as a “controlling person” in the lawsuit.
These recent legal actions by the SEC have sent shockwaves throughout the cryptocurrency market, prompting a surge in trading activity on decentralized exchanges and triggering significant movements in the landscape of digital assets.
