SEC Goes After Binance, Crypto Markets Down

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(as of  2:45 AM UTC, June 6, 2023) 

Overnight in Asia, the news broke of the Securities and Exchange Commission (SEC) in the United States suing Binance, Binance.US, and Binance founder Changpeng Zhao for violations of securities regulations in the country. This massive development has sent ripples through almost all crypto prices, most notably Bitcoin (BTC), which is now trading as low as US$25,765, down 4.63% in the last 24 hours, at a price level not seen since March this year. Ethereum (ETH) has seen a similar downturn, trading at US$1813.88 at time of writing, down 3.56% from the day before. 

The SEC in the United States accuses Binance and its founder of ‘comingling customer funds’, failure to register as a clearing agency, failure to register as a broker and failure to register as an exchange. Despite the suit, however, this is not the first time Binance has locked horns with the SEC, where the SEC made similar accusations of Binance illegally targeting US consumers.

Outside of cryptocurrency, traditional financial markets across the world remained relatively steady. The US S&P 500 saw a small drop of 0.2%, despite an overall upward trend this week, the Nikkei 225 trended upwards in the last 24 hours by 0.41%. Despite the steadiness of the markets overall, publicly traded cryptocurrency exchange Coinbase experienced an almost 9% drop in its stock price in the last 24 hours, which analysts link to the aforementioned SEC suit against Binance. 

On the other side of the world, in Australia, some contrastingly positive regulatory news has come out of the Australian central bank, the Reserve Bank of Australia (RBA). In response to an inquiry about a bill to regulate digital assets, the RBA stated that it ‘supports the development of regulatory arrangements for stablecoins’ on the condition that protections and safeguards are in place for investors and users, and that stablecoins could ‘become widely used for payments’ in the country. 

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