Bitcoin fell almost 6% and Ether lost 5% in a broad market fall by all top 10 non-stablecoin cryptocurrencies on Tuesday morning in Asia after the U.S. Securities and Exchange Commission (SEC) sued cryptocurrency exchange Binance and its founder Changpeng Zhao on charges of securities violations. The BNB token issued by Binance was the biggest loser with a drop of more than 10% in the past 24 hours.
Top 10 cryptos slide
Bitcoin dropped 5.66% over the last 24 hours to US$25,730 at 7:10 a.m. in Hong Kong, bringing losses over the past seven days to 7.23%, according to data from CoinMarketCap.
Ether fell 4.91% in the same period to US$1,808, and logged a 4.56% weekly loss.
BNB skidded 10.21% to US$275.17 in the last 24 hours, losing 11.61% over the past week.
The SEC on Monday filed 13 charges against Binance, alleging the exchange made unregistered and unlawful offers and sales of its BNB and BUSD tokens. The SEC also alleged that Binance did not register Binance.com as an exchange or a broker-dealer clearing agency.
In response to the SEC lawsuit, Binance said in a Tuesday statement that it intends to defend its platform “vigorously.”
“The SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry,” Binance said.
Cryptocurrencies traded on the Binance exchange, including BNB, BUSD, Solana, Cardano’s ADA, Polygon’s MATIC, are securities and require registration and regulation, according to the SEC suit.
Solana dropped 9.52% over the past 24 hours, with ADA falling 7.73% and MATIC losing 7.64%.
“The total crypto market cap is down,” Justin d’Anethan, head of APAC business development at Belgium-based crypto market maker Keyrock, told Forkast on Tuesday morning in Asia. “The fact that the news doesn’t come as a shock doesn’t mean that it was priced in, apparently.”
In a Monday tweet, SEC Chair Gary Gensler said that Zhao and Binance entities engaged in “an extensive web of deception, conflicts of interest, lack of disclosure and calculated evasion of the law.”
In response, Zhao tweeted: “Wonder if he ever reads the comments under his post, from the consumers he is [supposed] to protect.”
Wonder if he ever reads the comments under his post, from the consumers he is suppose to protect. https://t.co/xQjC872GsD
— CZ 🔶 Binance (@cz_binance) June 5, 2023
According to d’Anethan, the SEC’s legal action is not a surprise considering the U.S. Commodity Futures Trading Commission had earlier filed a lawsuit against Binance for alleged violations of trading rules for derivatives.
However, traders see the lawsuit as extremely bearish and it’s shaking up the market, he said.
The total cryptocurrency market cap fell 4.6% to US$1.09 trillion in the 24 hours through to 8:30am Hong Kong, while trading volume surged 118% to more than US$48 billion.
