Just 6.4% of Bitcoins on Exchanges Amid SEC Crackdown

Bitcoin’s supply on cryptocurrency exchanges has reportedly hit a five-year low.

That’s according to market intelligence platform Santiment, which said Tuesday (June 13) on Twitter that the supply had reached its lowest level since February 2018, at 6.4%.

“Traders continue moving $BTC to self custody during the uncertainty surrounding #Binance & #Coinbase,” the company tweeted, referring to the Securities and Exchange Commission (SEC) recent legal action against the two exchanges.

“As long as these #SEC lawsuits loom, this trend should continue,” Santiment added.

The SEC filed back-to-back suits against Binance and Coinbase last week, part of a broader crackdown by the agency on the crypto sector.

On June 5, the SEC accused Binance and founder Changpeng Zhao of misleading investors, violating securities rules and mishandling investor funds.

Binance has said it was “disappointed” with the SEC’s action, and maintains it has attempted to work with the commission on a negotiated settlement.

“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis,” the company said in a blog entry last week. “We intend to defend our platform vigorously.”

The SEC has also attempted to freeze the assets of Binance’s U.S., business, a move the company has said would essentially put it out of business.

However, Tuesday saw news reports that the SEC and Binance.US had agreed to try to come to an arrangement that would avoid the asset freeze while still protecting customer funds.

In court Tuesday, Judge Amy Berman Jackson pointed out that the freeze could have a larger impact than just its effect on Binance.

“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general,” the judge said.

Coinbase, meanwhile, has been accused by the SEC of functioning as an unregistered exchange, brokerage and clearinghouse.

“The SEC’s central legal claim is that Coinbase has pocketed billions of dollars by collecting transaction fees from investors without the legally required disclosures and protections of securities registration — exposing its customers to risk,” PYMNTS wrote last week.

Coinbase, meanwhile, has routinely countered that the commission has refused to give it a clear way to register as a compliant trading platform.