Buzz Feedz: On Monday, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance, the world's largest cryptocurrency exchange, and its CEO, Changpeng Zhao. The SEC accused Binance of secretly controlling the US, as part of a scheme to evade US laws. The charges included accusations of artificially inflating trading volumes, diverting client funds, failing to restrict US clients and misleading investors about market surveillance checks.
Following the news, cryptocurrencies and shares in cryptocurrency and blockchain-related companies experienced a significant drop. Bitcoin, the largest cryptocurrency, fell 5.45% to its lowest level since mid-March, while Binance's cryptocurrency fell 9.72%.
The SEC's lawsuit is the latest enforcement action taken by the agency to regulate the cryptocurrency industry, which SEC Chairman Gary Gensler has described as the "wild west." The crackdown has prompted some crypto companies to improve compliance measures, introduce new products and expand globally.
Binance stated that it had been cooperating with the SEC investigations and had made efforts to address the concerns and reach a settlement. However, the SEC's decision to litigate rather than seek a settlement indicates its aggressive approach towards the crypto industry.
Other prominent crypto companies, such as Coinbase and Kraken, have also faced regulatory challenges from the SEC. Coinbase disclosed in March that it had received a threatened lawsuit from the SEC regarding some of its products.
News of the SEC charges against Binance sent Coinbase shares tumbling 9.1%, while crypto miners Riot Blockchain, Marathon Digital, and Hut 8 Mining also saw declines.
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