Fri. Feb 23rd, 2024

• The SEC filed a complaint against Binance and its US-based sibling business, causing market makers to flee the exchange and leading to an 80% drop in liquidity.
• Coinbase was also named in the complaint, but with less severe allegations.
• The year 2023 has seen U.S. authorities take a harsh stance on the cryptocurrency sector after the FTX collapse in November.

SEC Complaint Against Binance

The Securities and Exchange Commission (SEC) recently filed a complaint against crypto companies Binance and its US-based sibling business for allegedly peddling unregistered securities. This news sent investors fleeing from both businesses which caused market depth on the US exchange to decline by almost 80%.

SEC Complaint Against Coinbase

The SEC also filed suit against Coinbase, another popular digital asset exchange in the United States, though with less severe allegations than those made against Binance and its US-based sibling business.

Harsh Assault On Cryptocurrency Sector

Since November of 2023 when the massive digital asset exchange FTX collapsed, U.S. authorities have taken a harsh stance on cryptocurrency firms accused of offering unregistered securities. This has caused many companies to close their doors while Bitcoin prices remain surprisingly high despite all of this scrutiny from regulators.

Binance’s Response

Binance claims that it is operating separately from its US-based affiliate but this response has been met with doubt due to the SEC’s allegation that CEO Changpeng Zhao commingled user assets via a “web of deceit” as outlined in their complaint last week Monday. After being sued by the SEC, Binance stopped allowing dollar deposits into their US exchange account as well.

Conclusion

While there are still some investors who are confident enough to stay in this potentially risky industry despite recent events, it is clear that most people have chosen to leave due to fear of further legal action from U.S regulators or potential losses resulting from instability within these markets.

By admin