Dear Readers,
Ever since the SEC made the lawsuit against Binance, there were huge lot of things are happening in the Crypto Industry.
We have witnessed a blood bath in the Crypto markets following the developments happened to comply to the US regulatory frameworks.
Compared to yesterday, where the crypto market witnessed more than 5%, today the global crypto market cap stands at $1.05 Trillion which is an increase of 0.87% from yesterday, according to the data from Coinmarketcap.com.
Let's discuss this further in this article.
Binance's U.S. affiliate formally announced that it would stop accepting deposits in dollars, while Robinhood Markets, a notable crypto trading platform, stated that it would remove certain cryptocurrency tokens from its platform. This decision came in response to the increased regulatory actions by the U.S. securities regulator- Securities and Exchange Commission (SEC) targeting the cryptocurrency industry.
Binance.US, which claims to operate independently from Binance, tweeted that its banking partners were preparing to halt dollar withdrawals as early as June 13. The move followed the U.S. Securities and Exchange Commission's request to freeze Binance's assets, and customers were given time until Tuesday to withdraw their funds.
This development represents another setback for the world's largest cryptocurrency exchange and raises concerns about the survival of its U.S. operations amidst the SEC lawsuit. The lawsuit accuses Binance of manipulating trading volumes and commingling customer assets, among other civil charges which is strongly denied by Binance.
Clara Medalie, the Director of Research at Kaiko, a Digital Asset Data Provider, commented on the situation, stating that it poses a significant threat to Binance.US. She emphasized that the inability of Binance.US to offer USD trading services in the region it was specifically designed for is an existential threat.
Additionally, Robinhood announced on Friday that it would delist three cryptocurrency tokens from its platform- Cardano (ADA), Polygon (MATIC), and Solana (SOL) from June 27- which were identified as securities in the SEC's lawsuit against Binance and a separate action against This indicates that the SEC's legal actions are already having an impact on the broader crypto markets.
Following this we have also witnessed a sharp decline in these crypto prices as well.
The Rewind:
On Monday, the SEC filed a lawsuit against Binance, its CEO Changpeng Zhao, and Binance.US, making 13 charges that accuse Binance of engaging in deceptive practices, inflating trading volumes, and diverting customer funds. The lawsuit also alleges that Binance and Zhao were secretly controlling the U.S. entity while claiming independence publicly.
Binance has not yet responded to requests for comment but has previously stated that it will vigorously defend its platform, arguing that the SEC's jurisdiction does not extend to Binance as it is not a U.S. exchange.
In a subsequent filing on Tuesday, the SEC requested a federal court to freeze Binance's U.S. assets, including over $2.2 billion worth of customer assets held in cryptocurrencies and approximately $377 million in U.S. dollar bank accounts. The SEC expressed concerns that Binance could transfer these funds offshore, while Binance.US called the motion "unwarranted."
On Thursday, Binance.US announced that the SEC's actions had posed challenges for its financial services providers, leading the exchange to stop accepting dollar deposits and transition into a "crypto-only exchange."
According to data firm Nansen, investors withdrew over $31 million from Binance.US in the 24 hours leading up to 12 p.m. EDT (1600 GMT) on Friday.
BAM Trading, the operator of Binance.US, holds customer funds with Axos Bank based in California, according to a letter from BAM Trading's lawyers to the SEC dated May 26, which was publicly disclosed by the SEC on Tuesday. Axos Bank has not yet responded to requests for comment.
Binance.US had encountered difficulties in finding banking partners following the failure of Signature Bank, as reported by the Wall Street Journal in April.
Binance.US stated that cryptocurrency-denominated trading, deposits, withdrawals, and staking would continue to operate normally.
Overall, there is a mess of uncertainty is being cooked up in the crypto industry at large.
