SEC Charges Against Binance and Coinbase
• The US Securities and Exchange Commission (SEC) filed charges against Binance and Coinbase for violating federal securities laws.
• The SEC alleges that Binance and Coinbase operated an unregulated international exchange, permitting U.S. clients to trade assets without adhering to the necessary registration and disclosure requirements.
• Following this news, cryptocurrency markets experienced a significant pullback as altcoins posted significant declines retesting 2022 lows.
SEC Files Lawsuit Against Binance
The United States Securities and Exchange Commission (SEC) took legal action against Binance, one of the world’s largest cryptocurrency exchanges, and its founder and CEO, Changpeng “CZ” Zhao. The SEC filed a lawsuit accusing both parties of violating federal securities laws by operating an unregulated international exchange, permitting U.S. clients to trade assets without adhering to the necessary registration and disclosure requirements. Furthermore, the agency claims that Binance and CZ commingled and diverted customer funds to entities owned by CZ, engaged in manipulative trading practices, and established a fake U.S. branch to evade law enforcement. CZ refuted the allegations on Twitter stating that Binance would release a formal statement in due course which they did shortly afterwards.
SEC Also Files Lawsuit Against Coinbase
Shortly after the lawsuit against Binance was filed, the U.S Securities Exchange Commission (SEC) turned its attention towards Coinbase -the largest exchange in the United States- alleging that it operated as an unregistered broker, securities exchange, and clearing agency for four years as well as claiming their Staking Program constituted an unregistered security offering. Brian Armstrong -CEO of Coinbase- denied these allegations on Twitter stating that the SEC had approved Coinbase’s business when it went public in 2021; while also issuing a statement asserting their firm’s commitment to compliance with federal regulations following this development with regards to cryptocurrencies being categorized as securities under US law .
Impact on Crypto Market Prices
The market responded negatively to this news resulting in notable declines for altcoins which tested 2022 lows; while Bitcoin also experienced significant losses during this time period due largely in part due regulatory uncertainties around cryptoassets being classified as securities under US law .
In conclusion , these two lawsuits filed by the US Securities & Exchange Commission around violations of federal securities laws have shed light upon some of the issues revolving around regulation within cryptocurrency markets . While some have criticized these actions taken , others view them positively since greater regulatory clarity could lead to more institutional investors entering into crypto markets over time .