SEC Charges Binance - The global crypto market has plummeted since the news of the Securities and Exchange Commission filing a lawsuit against Binanc
SEC Charges Binance – The global crypto market has plummeted since the news of the Securities and Exchange Commission filing a lawsuit against Binance rocked the internet.
On June 5, Binance the world’s largest cryptocurrency exchange by trade volume along with its CEO Changpeng ‘CZ’ Zhao and related entities were charged by the regulatory body with 13 violations. These violations include evasion of regulations, operating unregistered exchanges, and unregistered offer and sale of securities.
The legal action which was announced in a press release yesterday by the watchdogs has sent shock waves throughout the global crypto market. Following the news, the total crypto market capitalization fell below $53 billion.
Responding to the lawsuit, Binance said it was disappointed with the action given that it had always worked hand-in-hand with the regulatory body. However, the crypto firm has said that it will defend the charges “vigorously.”
The SEC’s alleged failure to offer regulatory clarification is a major component of Binance’s case. It went on to say that the firm was a victim of the continuous “regulatory tug-of-war,” in which government agencies compete to “claim jurisdictional ground from other regulators.”
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The SEC claims that while Binance.com alleged that it does not offer its services to customers in the U.S., Zhao and Binance secretly allowed “high-value U.S. customers” to continue trading on the Binance.com exchange.
Also, the Commission claimed that while Binance and its CEO claimed that Binan.US was an independent platform that is supposed to serve customers in the United States, Zhao and Binance “secretly controlled” the platform.
“Among other things, the SEC alleges that, while Zhao and Binance publicly claimed that U.S. customers were restricted from transacting on Binance.com, Zhao and Binance, in reality, subverted their own controls to secretly allow high-value U.S. customers to continue trading on the Binance.com platform. Further, the SEC alleges that, while Zhao and Binance publicly claimed that Binance.US was created as a separate, independent trading platform for U.S. investors, Zhao and Binance secretly controlled the Binance.US platform’s operations behind the scenes,” the press release states.
The crypto market reacts
Receiving the news of the new charges against the top exchange firm, the total crypto market cap plummeted. Just before the news was received, the total crypto market cap was at $1.13 trillion.
The subsequent dump bottomed at $1.08 trillion about an hour later when news got out, representing a $52.7 billion, or 4.7%, decline. Market participants are considering the weight of the situation and the general impact it will have in the coming times, especially with the claim that tokens including ADA, SOL, and MATIC were named as securities in the SEC lawsuit.