The price of major cryptocurrencies like bitcoin ( BTC), Ethereum ( ETH), and Tether’s USDT have increased dramatically on Binance.US. This is a sign that investors will be leaving the platform due to the actions taken by the U.S. Securities and Exchange Commission (SEC).

data show that the BTC-U.S. Dollar trading pair on binance.us reached a high of $28,800 on Wednesday morning. This was $1,700 more than other exchanges’ average prices at that time. The BTC-USD trading pair recently traded at $27900. Meanwhile, the CoinDesk Bitcoin Price Index, which is based on prices from multiple exchanges and feeds them, was at about $26,400. This difference is equivalent to a 6% premium over Binance.US.

The USDT-ETH pair traded at $1.932, while the CoinDesk Ether Price Index was at $1.840. Tether’s USDT was the most valuable stablecoin based on market capitalization. It traded at 6 cents over its $1 peg.

According to a Tuesday court document, the price anomaly occurred as the SEC sought to block assets from the exchange. The SEC filed a lawsuit on Monday against binance and binance.us. It accused them of multiple violations of federal securities laws.

Clara Medalie is the research director at digital asset data company Kaiko. She says that the unusually high premium in price indicates a deteriorating level of liquidity. Traders are retreating from the platform, anticipating a possible asset freeze.

Medalie wrote in a report that “market makers are cautious ahead of this double-blow to Binance’s U.S. subsidiary, and they are removing liquidity in the order books of the exchange in anticipation of a potential freeze.” “No trader would want to be caught with assets that are stuck on an exchange.”

BTC and ETH <a href="https://www.investopedia.com/terms/m/marketdepth.asp#:~:text=Market%20depth%20refers%20to%20a,trading%20within%20an%20individual%20security. Kaiko data show that market depth on Binance.US – the ability of the exchange to absorb large buy and sell orders without affecting the price – has decreased significantly since the Monday lawsuit.

(Kaiko)

Binance.US has announced Wednesday it will stop its OTC trading service and remove USDT, BTC, and BUSD trading pair from its Advanced Trading Platform. This move will enable the exchange to focus liquidity on the remaining asset and service pairs.

Binance.US customers have experienced price discrepancies before. In May, BTC-USD pair was $650 more expensive on Binance than it was on Coinbase. This occurred as crypto market observers pondered the possibility of an SEC crackdown, and U.S. market-makers started scaling back their operations.

Stephen Alpher edited the book.