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January 1, Another Crash in the Digital Currency Markets

Published

11 months ago

June 10, 2023

The announcement of a lawsuit by the Securities and Exchange Commission (SEC) against cryptocurrency exchange Binance and its CEO, Changpeng “CZ” Zhao, sent shockwaves through the cryptocurrency market on Monday, with Bitcoin plunging to its lowest level in months.

https://twitter.com/Karen904679428/status/1664568926381178880

Bitcoin’s value dipped over 6%, falling to around $25,500. This represents a nearly 14% decline from a high point about a month ago. Other cryptocurrencies, including Ethereum, the second-largest by market cap, also saw losses, with Ethereum slipping more than 5% to about $1,800.

However, the largest loser was Binance’s own token, Binance coin (BNB), which plunged nearly 10%. Investors fled Binance amidst uncertainty brought about by the SEC lawsuit, causing turmoil across the entire cryptocurrency ecosystem. Every one of the 100 largest cryptocurrencies was down on Monday afternoon, with many seeing double-digit decreases.

The SEC’s lawsuit accuses Binance, the world’s largest cryptocurrency exchange, and its CEO of lying to federal regulators and mismanaging customer funds. It is alleged that Binance covertly diverted customer funds to another trading entity controlled by Zhao, which then engaged in fraudulent trading to inflate Binance’s trading volume.

Binance is facing mounting legal scrutiny, with the Commodity Futures Trading Commission (CFTC) suing the company and Zhao in March for allegedly violating U.S. regulatory law. The company responded to the SEC’s allegations in a statement, asserting that it has been involved in good-faith discussions with the SEC to address their concerns.

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