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Crypto investors’ nightmare became reality today as the SEC took action following the CFTC, causing cryptocurrencies to trend downwards. What are the details of the case? It seems hot times have begun for crypto investors.
SEC vs. Binance Case
The US SEC has sued Binance and its CEO for violating securities laws. Recently, the commodities regulator CFTC had also filed a case concerning CZ and his associate. This lawsuit by the SEC was expected, and we had warned about it in the risks to be aware of section in June. Investors’ fears materialized, but the current environment suggests this lawsuit is not as bad news as before. The Coinbase exchange will also soon be officially sued by the SEC, and many US crypto companies have already faced off with the SEC.
In the case filed today, the SEC accused Binance of misusing customer funds and lying to regulators and investors about its operations. The regulatory agency claimed Binance mixed up “billions of dollars” in customer funds and secretly sent them to a separate company controlled by CZ. Accusations also include misleading investors about the adequacy of their systems to detect and control manipulative trading. Regulators also said Binance failed to take sufficient steps to restrict US investors’ access to Binance’s unregulated exchange.
Cryptocurrencies Falling
The price of Bitcoin is heading towards $26,000, losing its critical support area following the news. As first reported by Bloomberg, Changpeng ‘CZ’ Zhao, the founder and dominant shareholder of the digital asset giant Binance, is accused of violating US securities rules, according to a court file. The SEC filed the lawsuit in a federal court in the Columbia District.
Zhao stated in a tweet; “Our entire team is on standby, ensuring the stability of systems, including withdrawals and deposits. We will publish a response when we see the official complaint. We haven’t seen it yet. The media gets the information before us.”
As of 18:30, the SEC also shared its official complaint file.
