Binance.US experienced a significant market crash following the lawsuit slammed on the company by the US SEC last week.
The US arm of international crypto exchange Binance has seen a 78% market crash since the United States Securities and Exchange Commission (SEC) sued the company. The company has been struggling to maintain public trust as investors continue to fear for the safety of their funds. According toย data from digital assets data provider Kaiko, Binance.US has lost close to 80% of its market strength. Kaiko analyst Dessislava Aubert also confirmed the US market crash to Decrypt, adding that Binanceโs parent exchange and Coinbase have seen a more โmoderateโ decline.
Last week, the SECย suedย Binance for multiple alleged offenses, including misappropriating customersโ funds. According to the SEC, Binance illegally misappropriated user funds via Sigma Chain, a separate company allegedly controlled by CEO Changpeng Zhao.
The SEC also said that Binance allowed US customers to trade outside Binance.US. The companyโs US arm operates as a separate entity expected to comply with US trading and securities laws. However, the SEC says Binanceโs restrictions preventing US customers from trading on Binance international have been negligent. In addition, the SEC says Binance knowingly waived this rule for some โhigh-value US customersโ. According to SEC Division of Enforcement director Gurbir S. Grewal, Binance and Zhao โconsciously chose to evadeโ US laws to maximize profits.
Binance Suffers More Consequences than Market Crash
In response to the SECโs lawsuit, Binance.US suspendedย USD deposits from June 13. Following what the exchange describes as โextremely aggressive and intimidating tacticsโ by the SEC, Binance said it is suspending these deposits to protect customers. In an officialย tweet, Binance.US said its banking partners would also pause withdrawal channels.
Regardless of the suspension, Binance.US assured that all customer assets are safe and any downtime is likely due to high transaction volumes. Binance also said that it plans to temporarily transition to a crypto-only exchange.
Furthermore, Binance has halted several trading pairs amid its scuffle with the SEC. In anย announcementย on Monday, Binance announced the suspension of at least 5 ETH-related trading pairs, 4 BUSD pairs, and 10 BNB pairs.
Binance did not explain the suspension. It only specified that the announcement was general and may not affect some users depending on their jurisdictions. Regardless, considering the companyโs recent woes, the decision to suspend these pairs is interesting.
As part of the SECโs lawsuit, the commission added 10 assets to its list of cryptos considered securities. The letter mentioned BNB, ADA, BUSD, MATIC, SAND, COTI, AXS, MANA, SOL, and ATOM. Before now, the SEC had announced it considers several assets as securities, including XRP, TON, DASH, and OMG.
SEC Crackdown Good for DeFi
While Binance.US suffers a market crash amid the SEC crackdown, the DeFi market tells another story. Last week, CoinGecko data showed that the three largest exchanges at the time witnessed a 444% spikeย in median trading volume within 48 hours. The exchanges, Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum), and PancakeSwap v3 (BSC) recorded a cumulative $792 million rise in trading volume.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
