SEC Alleges Binance – Evasion of Regulatory Oversight and Enrichment by Billions
The cryptocurrency market sank on Monday following the news that the Securities and Exchange Commission (SEC) had filed a lawsuit in federal court.
The lawsuit accuses Binance, the world’s largest digital-assets exchange, of seeking to “evade critical regulatory oversight designed to protect investors and markets” while enriching itself “by billions of dollars.”
Binance Coin (BNB) Plummets Over 8% in Response to the Suit
Binance coin (BNB), the token used by exchange customers to obtain discounts on trades and other financial benefits, fell by more than 8%, according to Bitstamp. The value of BNB tumbled from $300 to $275 late in the day, shortly after 11 a.m. New York time, when news of the lawsuit began to circulate.
In addition, the Cryptocurrency Market Sees Overall Value Drop to $1.08 Trillion.
The lawsuit had a ripple effect on the entire cryptocurrency market, causing its value to decrease from $1.13 trillion to $1.08 trillion, as reported by CoinMarketCap.
SEC Focuses on Unregistered Sale of Cryptocurrencies – Affected Tokens Include Solana, Algorand, Cardano, and More
A key issue in the Binance suit was the allegation that the exchange sold cryptocurrencies deemed to be securities by the SEC without proper registration. Although the classification of tokens as securities remains unclear, the SEC has claimed that most tokens fall under this category and has specifically identified some in other legal actions.
As a result, the prices of these identified tokens experienced declines ranging from 6.6% to 13% on Monday.
Tokens affected by the lawsuit are Solana (SOL), Algorand (ALGO), Cardano (ADA), Filecoin (FIL), Polygon (MATIC), Decentraland (MANA), and Sandbox (SAND). These blockchain tokens, along with others, suffered price drops between 6.6% and 13%.
Bitcoin and Ether Experience Significant Declines in Response to Binance Lawsuit
The market leader, Bitcoin, was down 5.7% late in the day, plummeting to $25,550, its lowest point since mid-March. Ether, the second-largest cryptocurrency, experienced a comparatively milder drop of 3.5%. Notably, Ether was not listed as a security in the lawsuit.
Moreover, there is ongoing debate about whether it should be considered a commodity.
Coinbase Stocks Affected, SEC Plans Enforcement Action
In the stock market, Coinbase, the only publicly traded crypto exchange in the U.S., saw its stocks fall 8.2%. The SEC has put Coinbase on notice, indicating that it will also face enforcement action.
The SEC’s lawsuit against Binance has had a significant impact on the cryptocurrency market, with Binance Coin (BNB) taking an 8% hit. The lawsuit highlights the SEC’s concerns about the unregistered sale of cryptocurrencies, which has led to price declines for several tokens.
As the market reacts to this development, investors and industry participants are closely monitoring the outcome of the case.
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