In the last 24 hours, the global crypto market cap has fallen over 4.5 per cent, according to CoinMarketCap. Bitcoin, the largest crypto token by market cap, has fallen nearly 5 per cent and was trading at $25,720. This is the lowest it has touched since March 17.
Moreover, Binance Coin (BNB), a token used to pay transaction and trading fees on Binance, fell nearly 9 per cent in the last 24 hours.
In its 136-page complaint, the SEC said that Binance created separate US entities “as part of an elaborate scheme to evade US federal securities laws.” For three years, till June 2022, Sigma Chain, a trading firm owned by CZ, was engaged in artificially inflating the trading volume of crypto asset securities on the Binance.US platform, it added.
Binance was founded in Shanghai in 2017 by CZ, a Canadian citizen born and raised until 12 in China. While its holding company is based in the Cayman Islands, Binance says it does not have a headquarters and has declined to state the location of its main Binance.com exchange.
The SEC’s accusations are the latest in a series of legal woes for Binance. In March, another regulator in the US, the Commodity Futures Trading Commission, filed its own lawsuit against Binance, accusing it of operating in the country illegally. The exchange is also under investigation by the US Department of Justice.
“The market will respond sharply as the Binance-SEC saga unfolds; we should brace ourselves for a choppy market in the coming weeks,” Shivam Thakral, CEO of Indian crypto exchange BuyUcoin, told Business Standard. He added that this also highlights the need for regulatory clarity in the global crypto ecosystem.