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- The global cryptocurrency market experienced a substantial sell-off, losing over $53 billion in an hour, following the SEC’s legal action against Binance.
- Binance CEO, Changpeng Zhao (CZ), describes the SEC’s allegations as an “attack on the entire industry”.
The global cryptocurrency market took a hard hit on Monday, experiencing a significant sell-off that saw the cumulative market cap for digital assets fall by over 5%, representing a loss of over $53 billion within a single hour. This dramatic downturn was in response to the U.S. Securities and Exchange Commission (SEC) launching legal proceedings against Binance, the world’s largest cryptocurrency exchange.
The SEC slapped Binance and its co-founder, Changpeng Zhao (commonly known as CZ), with a lawsuit comprising 13 distinct charges. Central to the SEC’s allegations was the accusation that Binance and CZ had intermingled billions of dollars’ worth of user funds, highlighting that a portion of these funds was routed to a European entity under CZ’s control.
The SEC lawsuit draws attention to Binance.US, the American arm of the exchange, which the commission alleges was established to provide a protective shield for the parent exchange and its CEO, distorting the clear picture of law enforcement. Despite this alleged protective maneuver, the SEC insists on identifying Binance as an unregulated international exchange.
Specifically, the SEC’s complaint cites BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI as securities, accusing Binance.US of facilitating their trading. CZ, in response to these charges, has described the SEC’s allegations as an “attack on the entire industry”.
As the news broke, the impact on the market was immediately evident. Prices of Solana (SOL) and BNB fell by about 10%, while Cardano (ADA) saw an approximately 8% decline. Sandbox (SAND) also experienced a price fall of 7%. Bitcoin (BTC), the world’s premier cryptocurrency, registered a significant sell-off, causing its price to drop by over 5%.
Ethereum (ETH), too, was affected, falling by around 4%. According to data from Coinglass, over 116K traders were liquidated within the last 24 hours, leading to a total liquidation value of roughly $32 million.
Finally, the analytical platform, 0xScope, reported that Binance’s reserve assets witnessed an outflow of approximately $1.4 billion within the first hour of the SEC filing its lawsuit against the crypto exchange.
