SEC sues Binance – and the Bitcoin price collapses – t3n – digital pioneers

Binance faces SEC lawsuit. (Image: Shutterstock/Grey82)

The US Securities and Exchange Commission is getting serious and is suing the world’s largest crypto exchange Binance and its founder Changpeng Zhao – among other things for misuse of funds and violations of the law. The Bitcoin price slipped sharply.

Binance and founder Changpeng Zhao have long been targeted by US authorities. In March 2023, the capital market authority CTFC filed a lawsuit against the world’s largest crypto exchange. Now the US stock exchange regulator SEC (Securities and Exchange Commission) follows.

The SEC accuses Binance, Zhao and several subsidiaries of embezzling investors’ funds and intentionally circumventing laws on a total of 13 counts. Binance is said to mix money from customers with its own assets and secretly transfer it to a company controlled by Zhao, like it at BTC echo is called.

The defendants, it is said in the complaintwould have “enriched themselves by billions of dollars while at the same time putting investors’ wealth at significant risk.”

The SEC warned customers about the crypto exchange. This was “embroiled in an extensive network of deception, conflicts of interest, lack of disclosure and calculated circumvention of the law,” according to the US Securities and Exchange Commission in one communication.

Cryptocurrency prices, especially Bitcoin and Ethereum, plummeted after the lawsuit became known. Bitcoin prices, for example, have dropped by more than six percent to below $25,500.

After all, Ethereum recorded a minus of more than five percent. In the meantime, the second-largest cryptocurrency slipped to below $1,800.

The entire crypto market was now only worth $1.04 trillion – a drop of six percent. In the process, some large altcoins had to lose even more feathers. Some altcoins, including Pepe, lost over 15 percent in value.

The fact that the crypto market lost so much within a few hours was not least due to the liquidation of long positions – i.e. the bursting of bets on a further upward trend. Apparently, many investors had not expected the SEC lawsuit and the sharp drop in prices.

According to Coinglass, leveraged bets worth more than $250 million disappeared into thin air within four hours. Record for the year 2023.