Cryptocurrency exchange Binance has decided to transfer a significant amount of Tether (USDT) stablecoins from the Tron (TRC20) network to the Ethereum (ERC20) blockchain.
The official Twitter page of Tether has invited its community’s attention towards the major movement of the stablecoins:
In few minutes Tether will coordinate with a 3rd party exchange to perform a chain swap, converting from Tron to Ethereum ERC20, for 750M $USDt.
— Tether (@Tether_to) June 12, 2023
The #tether $USDt total supply will not change during this process.
Learn more about chain swapshttps://t.co/abfgnELSvi
To maintain liquidity, a move has been made in response to regulatory pressure from the US Securities and Exchange Commission (SEC). Binance has proactively transferred 750 million USDT stablecoins from the Tron network to the Ethereum blockchain in response to these developments.
Binance announced the transfer via its official Twitter account, stating that it would be conducted in collaboration with Tether, the issuer of USDT. This move aims to safeguard liquidity and ensure the stability of trading operations amidst the ongoing regulatory challenges faced by the exchange.
Transferring stablecoins between networks is seen as a strategic step to mitigate the impact of the SEC lawsuit against Binance. According to analysts at Kaiko, the liquidity of Bitcoin (BTC) on Binance.US experienced a sharp decline following the regulatory action. While BTC liquidity had been decreasing over the past few months, the claims made by the SEC played a decisive role in its substantial collapse.
Since March, the daily trading volume of Bitcoin on Binance.US has witnessed a significant drop, amounting to hundreds of millions of dollars. The situation worsened further as Binance users withdrew approximately 14,000 BTC following the filing of the SEC claim.
Last week, the SEC filed a lawsuit against Binance, its CEO Changpeng Zhao, and Binance.US, leveling 13 allegations that the platform involved extensive fraudulent activities, including the artificial inflation of trading volumes and the misappropriation of client funds. Additionally, the regulator accused Binance and Zhao of exerting remote control over the American division while publicly declaring its independence.
The lawsuit had an immediate and significant impact, resulting in a substantial outflow of deposits worth around $4 billion from Binance, Coinbase, and Binance.US within days. Notably, the Ethereum network witnessed the most significant net flow, with clients withdrawing a staggering $3.1 billion in just four days.
