Nearly 80% Liquidity Shrinks in 7 Days, Coin Safe US Becomes the Biggest Victim of SEC Litigation

Cailian News Agency, June 13th (Editor Ma Lan)On June 5, the U.S. Securities and Exchange Commission filed a lawsuit against Yuanan and its sisters company, Yuanan America, accusing its boss Changpeng Zhao and the two institutions of transferring customers' funds by participating in a network of fraud, lack of disclosure and deliberate evasion of the law.

Due to the latest severe crackdown measures imposed by local regulations, Coin America has become the most injured party in this lawsuit.

According to a report by encrypted data provider Kaiko, the total market depth of Coin On America fell by 76% in the week following the lawsuit, which measures the liquidity of 17 tokens on Coin On America. On June 4th, the market depth of Coin America was $34 million, while on Monday, only $7 million remained.

A large number of Market maker and traders have fled, and the US market share of the United States of America has plummeted from 20% in April to less than 5% at present.

At the same time, the global market depth of Coin Security has also decreased, with a 7% reduction since early June. The market depth of Coinbase, another US cryptocurrency exchange that has been attacked by SEC laws, has decreased by 16%.

Kaiko pointed out in the report that the sharp decline in liquidity shows that Market maker are very nervous. They want to avoid losses caused by fluctuations. They are very worried about the situation when FTX crashes again.

Good timing or bad timing

Panic also caused a large-scale sell-off in the Cryptocurrency industry. According to Coinshares' data, last week, digital asset investment products had a net outflow of $88 million, marking the eighth consecutive week of outflows, with a cumulative outflow of $417 million.

Coinshares analysis suggests that the outflow of cryptocurrency assets is related to monetary policy, and the regulatory crackdown on Coin An and Coinbase is the catalyst behind this decline.

However, Sean Farrell, head of digital asset research at data company FundStrat, believes that the decline in token prices may provide investors with a good opportunity to buy on dips. Litigation and price declines will further drive the sell-off, but will create some buying points in the coming days.

Sheraz Ahmed, the managing partner of STORM, also stated that short-term selling is expected, but there will be a recovery. He pointed out that many tokens are related to high-quality projects in blockchain, resulting in a strong recovery afterwards.

But there are also warnings to stay away from the troubled crypto exchanges. Investment bank Berenberg marked Coinbase's stocks as non investable in the short term in a report. Analyst Mark Palmer said that the company is expected to have very weak trading volume in the second quarter of 2023, and litigation will worsen this situation. It lowered the company's stock price from $55 to $39, a drop of nearly 30%.