The US branch of Binance has announced that it will no longer allow customers to trade on their platform using US dollars.
The crackdown by the Securities Exchange Commission on SEC continues on Binance as the US arm of the largest crypto exchange suspends dollar deposits and has urged its users to withdraw dollar deposits by Tuesday. Earlier this week, the SEC accused Binance of violating US securities laws for trading unregistered currencies and being unregistered venues.
SEC crackdowns on Binance
Binance has been accused by the SEC of mixing customer funds with a separate trading firm, Sigmachain and washtrading to inflate the trading volumes of US.Binance. The SEC filed a total of 13 charges in the lawsuit on Monday. CFTC, which is another regulatory body, has also accused Binance for being an unregistered securities exchange.
The Securities Exchange Commission has also accused the CEO of Binance, Changpeng Zhao, of lying to regulators. The crypto exchange is the world’s largest crypto exchange accounting for more than half of crypto trading volume around the world.
Earlier the SEC has also seeked freezing all the assets of US.Binance leading to a more than $800 million withdrawals after 24 hours of the announcement. Binance is urging its customers to withdraw dollar based deposits and says that the funds of customers remain safe. Binance said that they keep a 1:1 deposit ratio calming the panic in the crypto industry.
Bitcoin holds after crackdown, other crypto drags
Bitcoin has turned out to be the only major cryptocurrency which showed some recovery after the SEC crackdown, which rose 0.58% on Friday to $26,532 and fell to $26,332 today.
Others like Ethereum, BNB and Cardano traded on looses with Cardano down by almost 3%. Ethereum, the second largest cryptocurrency also fell $1,850 mark which is around $1828 today. The unfolding events in the SEC lawsuits and the upcoming Fed June meet are expected to drive the price of cryptos next week.
$1.91 billion, or 7.38% was the total volume of the 24-hour volume of the whole crypto market in DeFi. Stablecoin volume as a whole was $24.7 billion, or 95.36% of the 24-hour volume of the entire crypto market as of yesterday.
SEC tightens regulations on Cryptos
The SEC has continued on tightening its regulations since November last year after the FTX collapse. Along with Binance, another large Crypto exchange Coinbase is under the eyes of SEC.
On Tuesday, the SEC filed a lawsuit on Coinbase, another crypto exchange which is the largest in the US, of regulating without being registered since 2019. The SEC says that assets available in Coinbase meet the legal definition of securities and bring it under the regulation of securities law. SEC chair Garry Genslersaid that Coinbase deprives its customers of protection and a routine inspection by the SEC.
The SEC has been pushing crypto exchanges to register but the rules and guidelines of the exchanges do not allow the securities to be traded as regulated securities. Matt Levine at Bloomberg says that these lawsuits are meant to shut down the crypto exchanges in the US rather than getting them registered.
The volumes of cryptos traded have been falling due to SEC crackdown since the FTX collapse and most crypto exchanges in the US seek to move the business out the country.