Industry giants Binance and Coinbase saw $4 billion in weekly outflows after the main U.S. regulator last week sued the companies for various securities law violations.

Data from DeFi Llama shows that Binance saw $3.4 billion worth of outflows over the last seven days, while data from Nansen shows multi-asset outflows of $124 million from Binance.US and $1.79 billion from Coinbase over the same period.

Meanwhile, trading volume on decentralized exchanges (DEXs) surged more than 400% in the two days after the lawsuits were filed.

The U.S. Securities and Exchange Commission (SEC) last week sued Binance, its U.S.-based entity Binance.US and its CEO Changpeng Zhao for allegedly violating securities laws and offering unregistered securities to the public.

The following day, the agency brought a similar enforcement action against Coinbase, charging the crypto exchange with operating its platform as an unregistered national securities exchange, broker and trading agency.

The collective lawsuits targeting some of the largest crypto exchanges sparked panic amongst crypto investors who began to move funds off centralized platforms.

Binance’s Zhao addressed the withdrawals reported on Twitter, explaining that the level of outflows may have been overstated by some platforms.

“For reference, we processed $7b net outflow in one day last Nov,” Zhao said. 

Some on-chain analysts also pointed to how different the picture looks over a longer time frame. Zooming out, the charts show that the amount of Bitcoin held on Binance has been on an increasing trend since December 2022.