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- The SEC’s allegations against Binance, accusing it of mingling billions in user funds, has caused significant tremors in the global cryptocurrency market.
- CEO Changpeng Zhao, aka CZ, denounces the SEC’s actions as an assault on the entire crypto industry, as the lawsuit precipitated a massive sell-off in the market.
The cryptocurrency sphere was rocked on Monday as the U.S. Securities and Exchange Commission (SEC) mounted legal actions against Binance, the world’s most extensive crypto exchange. This event catalyzed a significant sell-off, resulting in a swift 5% drop – a staggering loss of over $53 billion – in the total digital asset market cap within a single hour.
With respect to Binance, I'm reading through the SEC complaint. It's over 130 pages, but seems like the next in a series of steps to implement chokepoint 2.0 in the United States. The end goal is a agenda based CBDC partnered with a handful of massive banks and end-to-end control…
— Charles Hoskinson (@IOHK_Charles) June 5, 2023
The SEC’s lawsuit, which includes 13 charges against Binance and co-founder Changpeng Zhao, alleges that billions of user funds have been mingled and transferred to a European company under CZ’s control. Interestingly, the SEC argues that the establishment of Binance.US was a tactical move to shield the exchange and its CEO from potential legal ramifications, thereby complicating law enforcement efforts. Despite this strategic maneuver, the regulatory body classifies Binance as an unregulated international exchange.
The SEC’s complaint specifically names BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI as Securities. They accused Binance.US of unlawfully making these available for trading. In response to these allegations, CZ depicted them as a direct attack on the crypto industry at large.
The SEC’s charges reverberated throughout the digital currency landscape, triggering a price drop for several major cryptocurrencies. Solana (SOL) and BNB saw their value plummet by roughly 10%, while Cardano (ADA) suffered an approximately 8% decline. Even Sandbox (SAND) was not spared, experiencing a 7% fall in its value.
Further shockwaves were felt as Bitcoin (BTC), the leading digital currency, saw its price drop over 5%, and Ethereum (ETH) fell by around 4%. In the last 24 hours, Coinglass data indicates that more than 116K traders were liquidated, resulting in approximately $32 million in total liquidation. The most substantial single liquidation, a whopping $9.94 million, occurred on the crypto exchange Bitmex.
Shortly after the SEC’s lawsuit became public, Binance’s reserve assets saw a swift outflow of around $1.4 billion. As this legal drama unfolds, the crypto industry braces itself for the potential long-term implications of this regulatory confrontation.
