Bitcoin fell following SEC suit against Binance
Bitcoin and the wider crypto market tumbled briefly then quickly steadied after the Securities and Exchange Commission (SEC) announced that it had filed a 13 charges suit against Binance, the largest crypto exchange in the world.
According to a press release on Monday, the suit alleged that Binance, its CEO Changpeng Zhao, and Binance.us operated an unregistered national securities exchange.
Bitcoin dips in reaction
The price of the pioneer cryptocurrency slumped quickly following the news of Binance being sued by the SEC. Crypto investors grappled with the news and a steep diver occurred overnight.
After the news broke, Bitcoin dropped as much as 6.5% to $25,491. The price quickly steadied above the $25,000 mark as the market was generally on a run of recovery.
Bitcoin traded back below its 100-day moving average at $27,015. The price currently trades at $26,700, just above the low for the day at $26,398.
In a Monday tweet, SEC Chair Gary Gensler said that Zhao and Binance platforms were engaged in a web of lies and deception, and calculated moves to evade the law.
The SEC’s lawsuit against Binance, according to renowned analyst Credible Crypto, helped the price of bitcoin reach its first target. According to his forecast, the price of bitcoin will only decrease during forced liquidations, but if it regains $27.5k, we will continue to move toward new all-time highs.
“It’s another blow to the crypto industry and the crypto exchanges of the world,” said Tony Sycamore, market analyst at IG Markets.
“If what (the SEC is) alleging is true … well, Binance is the biggest, and if this is going on at the biggest, what’s happening at the smallest? That is the natural link. It doesn’t fill investors with confidence.”
Read more: May favours Bitcoin hashrate amidst tumbling price
Lawsuit Triggers Withdrawals
Data from Nansen.ai shows that outflows from Binance across all protocols hit $719M over the last 24 hours.
Though the outflows seem huge, it doesn’t seem to have exchange’s stablecoins which has a stablecoin balance of just over $8B.
Crypto analytics company CryptoQuant, based in Seoul, noted in a Twitter thread that the withdrawals are well within historical norms.
The price of Solana has dropped by a huge margin of 13%, while Polygon reduced by 6%, Cardano slumped by 8%, and Filecoin dropped by 10%.
Disclaimer: CryptoPlug does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
