Crypto shares tumble after US SEC charges Binance with securities law violations

CRYPTOCURRENCIES and shares in crypto and blockchain-related companies tumbled on Monday after the US Securities and Exchange Commission (SEC) sued crypto exchange Binance and its founder, Changpeng Zhao, alleging violations of securities laws.

The SEC’s complaint against the world’s biggest cryptocurrency exchange listed 13 charges.

Bitcoin, the world’s biggest cryptocurrency was down 5.3 per cent after falling to its lowest level since mid-March following the news. Binance’s cryptocurrency fell 9.4 per cent.

The SEC said Binance and Zhao artificially inflated trading volumes and diverted customer funds, and also failed to restrict US customers from its platform and misled investors about market surveillance controls. The SEC said they also secretly controlled customers’ assets, allowing them to commingle and divert investor funds “as they please”.

In a blog post, Binance said: “We intend to defend our platform vigorously,” adding that “because Binance is not a US exchange, the SEC’s actions are limited in reach”.

Shares of rival crypto exchange Coinbase Global were down 11.6 per cent, while Blockchain farm operator Bitfarms stock was down 5.8 per cent.

Crypto miner Riot Platforms was off 8.2 per cent while Marathon Digital was down 8.7 per cent, and Hut 8 Mining was off 3.9 per cent. Bit Digital fell 8.1 per cent.

Shares of software firm and BTC buyer MicroStrategy declined 8.4 per cent.

BTC mining machine makers Ebang International and Canaan were down 2.3 per cent and 6.1 per cent, respectively.

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In March, Binance and Zhao were sued by the US Commodity Futures Trading Commission for operating what the regulator said was an “illegal” exchange and a “sham” compliance programme. REUTERS