Binance Faces US Legal Action
Cryptocurrencies experienced a widespread decline following the accusations made by the US Securities and Exchange Commission against Binance Holdings Ltd, accusing them of mishandling funds and providing false information to regulators.
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The SEC lawsuit also claimed that certain tokens, including as Solana, Cardano, Polygon, Filecoin, Cosmos, Sandbox, Decentraland, Algorand, Axie Infinity, and COTI, which were traded on Binance.com and Binance.com, were deceptive. US, were offered and sold as securities. This development could have far-reaching consequences for other exchanges that offer these coins. As a result, Solana fell by up to 13%, Cardano fell by 8%, Polygon fell by 6%, and Filecoin fell by 10%.
Crypto Market Shaken
As a result of these events, Bitcoin also experienced a decline of up to 6.7% to $25,415, reaching its lowest point since April. Binance Coin, the company's native coin, has also plummeted by up to 13%. According to CoinMarketCap data, Bitcoin accounts for about half of the total value of the $1.2 trillion cryptocurrency market. Meanwhile, Binance Coin is the fourth-largest coin, with a market capitalization of around $43 billion. It is worth noting that Binance handles about half of all cryptocurrency trading volume.
Binance Faces US Legal Action: Key Points
• According to Coinglass, a tracker, approximately $250 million worth of trading positions were liquidated in the past four hours, primarily from traders who were speculating on higher prices.
• The charges are the most recent in a slew of regulatory measures against Binance and its co-founder and CEO, Changpeng Zhao.
• In March, the US Commodity Futures Trading Commission accused Binance and Zhao of consistently violating American derivatives regulations.
• Furthermore, the US Justice Department has been investigating whether Binance was utilized unlawfully to help Russians evade US sanctions and transfer money, as reported by Bloomberg in May.
• Austin Campbell, an adjunct professor at Columbia Business School, commented that these developments align with people’s existing expectations and could encourage the movement of assets offshore, leaving the US behind.
• On Monday, the Securities and Exchange Commission (SEC) filed a case in a US federal court accusing Binance of violating investor protection requirements by operating unregistered exchanges, misrepresenting trading controls, and selling unregistered securities, among other things.
• Initially, Zhao seemed to downplay the allegations by tweeting about the number 4, which he has been using to refer to “FUD” (fear, uncertainty, and doubt).
• This term describes the anxiety that can arise in the cryptocurrency market following a previous market decline and a series of corporate failures.
In response, Binance published a blog post stating that the SEC’s allegations should not warrant an enforcement action and that they intend to vigorously defend their platform.
