Global cryptocurrencies plunge as US sues Binance exchange

Cryptocurrency prices fell across the board as the US Securities and Exchange Commission (SEC) accused the Binance exchange of misusing customer funds and defrauding regulators.

In a lawsuit filed in federal court in Washington (USA) on June 5, the SEC accused tokens traded on Binance.com and Binance.US, including Solana, Cardano, Polygon, Filecoin, Cosmos, Sandbox, Decentraland, Algorand, Axie Infinity and COTI, of being offered as securities.

They also allege that the world’s largest cryptocurrency exchange violated investor protection rules. Binance was accused of inflating trading volumes, diverting customer funds, failing to restrict U.S. users from the platform, misleading investors about its market controls, and selling unregistered securities.

This information caused Bitcoin to lose 6.7% this morning, to 25,415 USD per coin - the lowest since April. Binance Coin - Binance's token - decreased by 13%. Ethererum - the world's second largest cryptocurrency - is also losing value.

Solana price fell 13% this morning. Cardano lost 8%. Polygon fell 6% and Filecoin lost 10%.

Bitcoin price movements over the past 24 hours. Chart: CoinDesk — Bitcoin price movements over the past 24 hours. Chart: *CoinDesk*

Data from CoinMarketCap shows that the cryptocurrency market currently has a total capitalization of $1.2 trillion, of which Bitcoin accounts for half. Binance Coin is the fourth largest token, with a capitalization of $43 billion. Binance is currently the world's largest cryptocurrency exchange, handling 50% of global trading volume.

The SEC charges are the latest legal challenge facing Binance and its co-founder and CEO Changpeng Zhao (CZ). In March, the U.S. Commodity Futures Trading Commission (CFTC) also accused Binance and Zhao of violating U.S. derivatives regulations. The U.S. Department of Justice is also investigating whether Binance was used by Russians to circumvent U.S. sanctions on money transfers.

In a lawsuit filed in US federal court on June 5, the SEC listed 13 charges against Binance and Zhao (CZ). Zhao did not seem too worried about these allegations. On Twitter, he posted a post, asserting that Binance employees are still working to "ensure the stability of the system, including withdrawals and deposits."

Binance also asserted in a statement that it disagrees with the allegations and will “work to defend its platform.”

"The SEC suing Binance is not surprising. They have taken legal action against many other exchanges and it was just a matter of time before they went after the biggest player in the industry," said Jeffrey Blockinger, Chief Advisory Officer at Vertex Protocol exchange.

Ha Thu (according to Bloomberg)

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