Cryptocurrency prices plunged Monday after the U.S. Securities and Exchange Commission accused Binance, the world’s largest cryptocurrency exchange, of violating securities laws.
Bitcoin It fell 5.5% to $25,662.50, its lowest since March, according to Coinmetrics.
ether It fell 5.1% to $1,807.79. binance coinTrading fees and tokens used to pay trading fees on the Binance exchange fell 9.5%.
The drop comes after the SEC alleges that Binance and its co-founder Zhao Changpeng violated securities laws by mixing billions of dollars of investor money with their own. The complaint follows similar charges against Binance earlier this year by the Commodity Futures Trading Commission.
Sam Callahan, principal analyst at bitcoin services firm Swan Bitcoin, told CNBC, “Binance is the largest cryptocurrency exchange by trading volume, so it’s amazing how the market reacted to the news. It doesn’t matter,” he said. “Any regulatory action against major players in the cryptocurrency space will bring uncertainty and lead to increased market volatility in the short term.
“However, such fluctuations are often temporary and prices may recover once the market absorbs the news,” he added. “In the long term, this can be seen as a healthy development of the ecosystem as the bad guys are wiped out and funds flow from cryptocurrencies with significant regulatory risk to Bitcoin.”
The lawsuit is the latest development in US regulators’ crackdown on the cryptocurrency industry this year. Since January, the SEC has accused Kraken, Genesis and Gemini Trust of providing unregistered securities to investors and has warned Coinbase of potential securities claims.
Bitcoin fell 7.9% in May to record its worst monthly trading since November after trading in a narrow range between $26,000 and $28,000 last week. Technical analysts see $25,200 as the key level to watch for Bitcoin’s downside.
