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SEC files lawsuit against the crypto exchange giant and Binance Coin (BNB) collapses: what’s going on?

The latest news is not good for the crypto exchange giant Binance and its native crypto Binance Coin (BNB).

Indeed, following the news that the SEC has filed a lawsuit against Changpeng Zhao‘s exchange, the price of Binance Coin (BNB) is falling rapidly. 

Below are all the details. 

Binance Coin (BNB) in decline: the SEC is the cause

As anticipated, after the announcement by the US Securities and Exchange Commission (SEC) regarding a lawsuit against Binance, the platform’s native Binance Coin (BNB) token) has fallen in value. 

In addition, the SEC stated in court that it considers BNB a security under US law. 

Currently, BNB is trading at about $285 against USDT, registering a decrease of about 6.7% in the last 24 hours, according to TradingView data. 

As was to be expected, the news has also caused a decrease in cryptocurrency prices across the market. 

Bitcoin, for example, is down about 2.7%, while Ethereum is down 1.9%.

In a recent tweet, Binance CEO Changpeng Zhao said the following: 

SEC vs Binance: $200 million liquidations exceeded in one hour 

According to the latest available data, it appears that the lawsuit filed by the Securities and Exchange Commission (SEC) against Binance has caused more than $200 million to be wiped out in one hour by cryptocurrency investors who had positions in the market.

Following this news, the total market capitalization of digital assets decreased by 2.87% to $1.12 trillion

Moreover, in the past 24 hours, the cryptocurrency market recorded liquidations totaling $298.51 million, involving more than 110,000 traders.

According to Coinglass data, long traders suffered losses of $275.31 million, with Bitcoin and Ethereum responsible for $130.46 million of these losses. 

On the other hand, short traders recorded liquidations of $23.2 million, with the top two cryptocurrencies accounting for about 49.5% of those losses.

Other cryptocurrencies such as BNB, Chainlink, XRP, Litecoin, and Solana recorded liquidations of less than $2 million each. 

Most liquidations occurred on exchange platforms such as OKX, Binance, and ByBit, which accounted for 75% of total liquidations, with 92% of long positions. 

Not only that, other exchanges such as Huobi, Deribit, and Bitmex also recorded a significant amount of total liquidations. 

However, the most significant liquidation occurred on Bitmex with the XBT/USD trading pair, worth $9.94 million.

Why is the SEC charging Binance? The 10 tokens that allegedly violated securities law 

In the indictment filed by the SEC against Binance, the regulator advanced new restrictions on cryptocurrencies, alleging that 10 additional tokens violate securities laws.

According to documents filed in federal court, the SEC classified the following tokens as securities: SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI. The SEC refers to these ten tokens and others as “crypto asset securities” in its complaint.

In addition, the SEC wrote in the court filing the following: 

“The defendants illegally solicited US investors to buy, sell and trade cryptocurrency securities through unregistered trading platforms.”

In any case, there are currently no known civil cases or complaints filed by the SEC against the issuers mentioned. Mike Selig, a consultant with the Department of Asset Management and a member of the Willkie Digital Works practice, said in a tweet on the matter: 

In its charges against Binance, the SEC alleged that the world’s largest cryptocurrency exchange had misappropriated users’ funds, a prosecution that seemed to have some similarities to the charges brought against FTX and its founder Sam Bankman-Fried.

Alessia Pannone
Alessia Pannone
Graduated in communication sciences, currently student of the master's degree course in publishing and writing. Writer of articles from an SEO perspective, with care for indexing in search engines.
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