In the ongoing feud with the United States Securities and Exchange Commission (SEC), Binance has been witnessing significant difficulties. Notably, weeks after the lawsuit, things still haven’t got normal for Binance.US with the waning trust of investors.
According to recent data from Kaiko, a cryptocurrency based data provider, Bitcoin has been trading at a lower price on Binance. Data suggests that while the asset crossed $30,000 mark during the weekend, Binance has been selling it at about $1,000 lower.
While Bitcoin prices surged last week, contrary happened on Binance considering the increasing selling pressure. Ever since the lawsuit from the US Securities and Exchange Commission (SEC), Binance has been experiencing intense inflows on the exchange.
On June 5th, the SEC filed 13 charges charges against the exchange, including unregistered offers and sales of the stablecoins – BNB and BUSD, its services namely the Simple Earn and BNB vault products, and its staking program. Additionally, the regulator claims in its suit that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency.
Following the lawsuit, the SEC filed an emergency motion in the US court to temporarily freeze the assets of Binance US. The SEC explained that the exchange and its CEO Changpeng Zhao (CZ) attempted commingling of users funds and it was essential to safeguard the customers’ interests.
While the motion didn’t pass through and both the parties settled on mutually comfortable terms, the customers have been wrapped in growing fear and uncertainty. As evident in the past weeks, the case against Binance is pretty different that of Coinbase which forced investors to turn their back to exchanges amid the intensifying crackdown.
Additionally, Binance also announced delisting of several trading pairs and halting of USD services. Not just that, the exchange is under DoJ investigation for money laundering and some even anticipate a serious punishment there.
Further, there has been rising global concerns against considering the investigations in multiple countries. Apart from the US, Binance is facing severe issues in Netherlands, France, Brazil and Belgium.
Reportedly, all this triggered investors to worry about their funds not because of the asset but the exchange. Simultaneously, the leaked chats between the firm’s executives have prompted serous questions about Binance’s legitimacy.
However exchange is trying to put up a good fight which has also received some backing from the industry, but the problems cover for the larger share. In the past months, the market shares of Binance have declined by over 12% which escalated following the enforcement action. As the case further unfolds, the exchange is going to witness several highs and lows however the primary stakeholders i.e. the investors interests must be prioritised to instil their faith in the larger digital assets industry.