The value of cryptocurrencies and stocks related to crypto and blockchain companies experienced a significant decline on Monday following the announcement that the U.S. Securities and Exchange Commission (SEC) has filed charges against Binance, a prominent crypto exchange, and its founder, Changpeng Zhao, for violating securities laws.
The SEC has presented a complaint listing 13 charges against the world's largest cryptocurrency exchange.
As a result of this news, Bitcoin, the leading cryptocurrency, dropped by 5.3%, reaching its lowest level since mid-March, while Binance's cryptocurrency, BNB, fell by 9.4%.
The SEC claims that Binance and Zhao engaged in activities such as inflating trading volumes, diverting customer funds, misleading investors about market surveillance controls, and failing to restrict U.S. customers from their platform. The SEC also alleges that they exerted control over customers' assets, allowing for the mixing and diversion of investor funds.
In response, Binance released a blog post stating their intention to vigorously defend their platform and downplaying the impact of the SEC's actions since Binance is not a U.S.-based exchange.
The charges against Binance also had a ripple effect on other crypto-related stocks, with Coinbase Global, Bitfarms Ltd, Riot Platforms Inc, Marathon Digital, Hut 8 Mining, Bit Digital, MicroStrategy, Ebang International, and Canaan Inc all experiencing declines in their share prices.
It's worth noting that in March, Binance and Zhao were sued by the U.S. Commodity Futures Trading Commission for operating an "illegal" exchange and a compliance program that was deemed to be a "sham."
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