The SEC accuses crypto firms of peddling unregistered securities.
Binance and its US-based sibling business were named in a complaint filed by the SEC.
Investors are fleeing Binance and its sibling business Binance US because of their legal problems with U.S. authorities. Kaiko, a cryptocurrency analytics business, reports that since the SEC complaint was filed last week, market depth on the US sibling exchange has dropped by roughly 80%.
Binance and its US-based sibling business were named in a complaint filed by the SEC on Monday, which alleges that Binance CEO Changpeng Zhao commingled user assets via a “web of deceit.” According to Dessislava Aubert, a Kaiko analyst, market makers have left Binance US in huge numbers, causing liquidity to fall by almost 80% over the past week.
Harsh Assault on the Sector
According to Binance, Binance US is a separate crypto exchange that utilizes the same logo but is operated by a different company. Binance is the largest cryptocurrency trading platform in the world. However, the SEC’s complaint casts doubt on the company’s claim that its US affiliate is a different entity.
In the United States, Coinbase is the most popular digital asset exchange. The next day, the SEC also filed suit against it, but with less severe allegations. Binance US halted dollar deposits after being sued by the SEC.
The year 2023 has not been kind to cryptocurrencies: U.S. officials have initiated a harsh assault on the sector after the November collapse of the massive digital asset exchange FTX, leading to the closure of a number of businesses.
Particularly, the SEC has tightened its grip on crypto firms it accuses of peddling unregistered securities. Bitcoin, the biggest cryptocurrency by market size, is risen dramatically this year despite the tighter grip on the industry.