As the case between the United States Securities and Exchange Commission (SEC) and Binance.US grows, both the entities are taking numerous steps to bring their strongest game. Simultaneously, considering the allegations and the firm’s reputation, the market is also witnessing significant movement and a lot of anticipation.
On Tuesday, Changpeng Zhao (CZ), CEO of Binance, publicly opposed the rumors that the exchange was selling Bitcoin to protect BNB’s price. In a tweet, the CEO confirmed that the exchange has not sold any Bitcoin or BNB and still holds plenty of FTT, the token from the collapsed exchange FTX.
Notably, CZ’s statement refutes the flying theory that Binance has been taking steps to manipulate the prices of BNB. Analysts had alleged that Binance was washing-trading BNB’s trading volume to maintain its price above a certain threshold. On June 12, crypto analyst JW alleged Binance was selling “spot Bitcoin at an alarming rate” to defend BNB’s price from dropping below $220. JW said:
As spot Bitcoin is sold off, BNB is purchased, which defends the $220 liquidation but also caps the upside potential of Bitcoin.
Simultaneously, technical analysis platform Skew corroborated JW’s statement, claiming Binance appears to have been selling BTC for USDT, which is then pumped into BNB since May 27. The platform further noted that BNB was being sold off for BUSD to suppress BTC volatility. It added:
This is technically market manipulation, Binance is definitely up to something here to prevent BNB from crashing as well BTC.
Meanwhile, market analyst Joe Consorti pointed out that there was an unusual price action on Binance. Consorti added “loads of selling pressure on Bitcoin not present on other exchanges. More cannon fodder that they may be selling spot BTC to prop up BNB.”
According to these analysts, Binance was defending the $220 level to prevent a “liquidation waterfall.” Previously analysts had anticipated that Binance’s BNB ecosystem faces a $200 million liquidation if its price falls below $220. To these spreading rumors, CZ wrote:
It is amazing they can know exactly who sold based on just a price chart involving millions of traders. FUD.
However, following the CZ’s comments on the rumors, the BNB has pushed back its game. As of writing, the asset is trading at $246.51, about a 1.01% surge over the past day and about a 5.44% decline over the past 5 days. On the other hand, Bitcoin is trading at $25,994.50, about 1.84% decline over the past 5 days.
On June 5th, the SEC filed 13 charges against Binance accusing it of selling unregistered securities and BNB was one of the numerous digital assets that the SEC labeled as security in its lawsuit. Additionally, the regulator claimed in its suit that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency.
The day following the lawsuit, the SEC filed an emergency motion in a US court to freeze the assets of Binance.US. While the Binance claimed this motion to be unwarranted, it announced its decision to delist some pairs and expanded the list for June 14th. The exchange also suspended USD withdrawals and deposits to adopt a business model focused solely on cryptocurrencies.
Binance also countered SEC’s emergency motion and filed a plea in the court requesting the judicial body to deny SEC’s request. To which, the US district court advised both parties to come to a mutual solution that would not hurt customers’ funds. Amid the ongoing case, the exchange has been witnessing significant outflows indicating a sign of panic and uncertainty among investors.