Active Stocks
Mon Dec 04 2023 13:22:58
  1. Reliance Industries share price
  2. 2,419.8 1.1%
  1. Power Grid Corporation Of India share price
  2. 212.75 1.14%
  1. State Bank Of India share price
  2. 591.4 3.42%
  1. Tata Steel share price
  2. 131.05 0.85%
  1. HDFC Bank share price
  2. 1,596.05 2.61%
Business News/ News / World/  Cryptocurrencies stumble after US files charges against Binance
Back Back

Cryptocurrencies stumble after US files charges against Binance

Cryptocurrencies fell after the US SEC accused Binance of mishandling funds and lying to regulators. The SEC also alleged that certain tokens offered on Binance.

Binance founder Changpeng Zhao was named as a defendant in the SEC lawsuit.Premium
Binance founder Changpeng Zhao was named as a defendant in the SEC lawsuit.

Cryptocurrencies slumped across the board after the US Securities and Exchange Commission accused Binance Holdings Ltd. of mishandling funds and lying to regulators.    

In the lawsuit, the SEC also alleged that certain tokens - including Solana, Cardano, Polygon, Filecoin, Cosmos, Sandbox, Decentraland, Algorand, Axie Infinity, and COTI - that traded on and Binance.US were offered and sold as securities, a move that could have wide implications for other exchanges that offer these tokens. Solana fell as much as 13%, while Cardano dropped 8%, Polygon slipped 6% and Filecoin slumped 10%.

Bitcoin fell as much as 6.7% to $25,415, the least since April, as of 4:51 p.m. in New York. Binance Coin, the native token of the ecosystem of the world’s biggest digital asset exchange, slumped as much as 13%. Bitcoin accounts for almost 50% of the value of the $1.2 trillion crypto market, according to data from CoinMarketCap. Binance Coin is the fourth-largest token, with a market value of around $43 billion. Binance handles around 50% of all crypto trading volume.

Data from tracker Coinglass shows that nearly $250 million worth of trading positions - mostly from traders who were betting on higher prices, were liquidated during the past 4 hours.

The charges are the latest regulatory action against Binance and its co-founder and chief executive, Changpeng Zhao. In March, the US Commodity Futures Trading Commission alleged that Binance and Zhao routinely broke American derivatives rules. The Justice Department has been investigating whether Binance was used illegally to let Russians skirt US sanctions and move money, Bloomberg reported in May.  

“This is more a confirmation of what people are already expecting and will just continue the push of putting everything offshore and leaving the US behind," Austin Campbell, adjunct professor at Columbia Business School, said in a direct message. 

In a case filed in US federal court on Monday, the SEC alleged that the firm flouted investor protection rules by operating unregistered exchanges, misrepresenting trading controls and selling unregistered securities, among other violations.   

Zhao appeared to initially downplay the allegations, sending a Twitter message highlighting the number 4, which he has been using to reference ‘FUD.’ That is shorthand for fear, uncertainty and doubt — a phrase used to describe the waves of anxiety that can flare up in crypto in the wake of last year’s market rout and a series of corporate blowups. 

Binance stated in a blog post that the SEC allegations shouldn’t be subject to an enforcement action and that it intended to “defend our platform vigorously."

“The SEC going after Binance is no surprise, as they have already gone after a number of other centralized crypto exchanges and it was likely only a matter of time before they took action against the biggest player in the space," said Jeffrey Blockinger, chief counsel at decentralized exchange Vertex Protocol.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Catch all the Elections News, Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 06 Jun 2023, 06:29 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App