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During a week marked by heightened regulatory scrutiny, the cryptocurrency industry experienced a significant milestone as the United States Securities and Exchange Commission (SEC) filed charges against Binance and Coinbase. Against the backdrop of a broader regulatory push, the SEC categorized numerous crypto assets as securities in these lawsuits. The market responded to this development with a notable impact, as altcoins posted significant declines, with some retesting 2022 lows.&nbsp;



<h2 class="wp-block-heading" id="sec-sues-binance-changpeng-zhao">SEC sues Binance, Changpeng Zhao</h2>



This week, the United States Securities and Exchange Commission (SEC) <a href="https://crypto.news/sec-sues-binance-and-cz-for-securities-violations/">took</a> legal action against Binance, one of the world&#8217;s largest cryptocurrency exchanges, and its founder and CEO, Changpeng &#8220;CZ&#8221; Zhao. The SEC filed a lawsuit accusing both parties of violating federal securities laws.




 
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The SEC alleges that Binance and CZ operated an unregulated international exchange, permitting U.S. clients to trade assets without adhering to the necessary registration and disclosure requirements. 



Furthermore, the agency claims that Binance and CZ commingled and diverted customer funds to entities owned by CZ, engaged in manipulative trading practices, and established a fake U.S. branch to evade law enforcement.



According to the SEC, Binance and CZ deliberately disregarded regulations, potentially exposing investors to risks for their financial gain. On Twitter, CZ refuted the allegations and stated that Binance would release a formal statement in due course, which the company subsequently did.



<h2 class="wp-block-heading" id="coinbase-remains-resolute-despite-the-lawsuit">Coinbase remains resolute despite the lawsuit</h2>



Shortly after the lawsuit against Binance, the U.S. Securities and Exchange Commission (SEC) turned its attention to Coinbase, the largest exchange in the United States. 



The SEC <a href="https://crypto.news/sec-sues-coinbase-just-hours-after-binance/">alleged</a> that Coinbase operated as an unregistered broker, securities exchange, and clearing agency for four years. Additionally, the SEC claimed that Coinbase&#8217;s Staking Program constituted an unregistered security offering.



Brian Armstrong, the CEO of Coinbase, took to Twitter to deny the allegations and stated that the SEC had approved Coinbase&#8217;s business when the company went public in 2021. Coinbase also issued a statement expressing its disappointment with the SEC&#8217;s action and confirming its cooperation with the ongoing investigations.



The lawsuits against Binance and Coinbase share a common denominator: facilitating the trading of unregistered securities.&nbsp;



The SEC&#8217;s lawsuits specify several crypto assets, including polygon (MATIC), solana (SOL), cardano (ADA), BNB, and BUSD, as examples of unregistered securities.



In response to the lawsuits, Brian Armstrong <a href="https://crypto.news/coinbase-affirms-support-for-tokens-amid-sec-lawsuit-no-delistings-planned/">tweeted</a> that Coinbase has no intention to delist any of the tokens mentioned in the case and will continue its normal operations until a court decision is reached. 



Armstrong also criticized the SEC for its lack of clarity and consistency in regulating the crypto industry. Coinbase assured its users that all assets held on its platforms remain safe and secure.



<h2 class="wp-block-heading" id="binance-us-feels-the-impact-of-sec-8217-s-actions">Binance US feels the impact of SEC&#8217;s actions</h2>



Two days after filing the lawsuit against Binance and affiliated companies, the SEC <a href="https://crypto.news/sec-seeks-express-court-order-to-freeze-binanceuss-assets/">filed</a> a motion in a federal court to freeze the assets of Binance US, the United States subsidiary of Binance, and force it to repatriate funds held by its customers in cryptocurrencies and fiat currencies. 



The regulatory watchdog claims the order is an attempt to mitigate the chances of the dissipation of assets by Binance and Zhao. The agency cited past cases of alleged violations of United States laws as its motivation. Binance US confirmed that customer assets are safe. Zhao also clarified that if the judge grants the motion, it would only affect Binance US, not the international exchange.



On June 7, Binance US <a href="https://crypto.news/binance-us-pauses-otc-trading-removes-numerous-trading-pairs/">announced</a> its intention to delist up to 100 trading pairs and suspend its over-the-counter (OTC) trading service. Most of the trading pairs involved pairs with tether (USDT). 



Still, the SEC&#8217;s complaint did not influence the delisting, as most assets branded as securities by the SEC remain tradable on the platform.



Two days later, Binance US <a href="https://crypto.news/binanceus-suspends-usd-deposits-and-withdrawals/">disclosed</a> that its banking and payment partners have decided to pause USD fiat channels provided to the platform. This move came in response to the regulatory and legal challenges. As a result, Binance US noted that users could not make fiat USD deposits and withdrawals on the platform.



However, the exchange clarified that this does not affect its crypto services, assuring customers of the security and safety of their funds. Binance US mentioned that it would start delisting all USD pairs from next week to switch to a crypto-only exchange.



<h2 class="wp-block-heading" id="binance-pursues-growth-efforts-despite-the-regulatory-hurdle">Binance pursues growth efforts despite the regulatory hurdle</h2>



This week, the Nigerian Securities and Exchange Commission (SEC) also focused on Binance. Following the Central Bank of Nigeria&#8217;s implicit ban on crypto transactions, Nigerians have increasingly relied on peer-to-peer (P2P) trading, with Binance being one of the prominent exchanges utilized.



Amid the rise of P2P crypto trading, the Nigerian SEC <a href="https://crypto.news/nigeria-sec-declares-binance-operations-in-country-illegal/">issued</a> a statement this week explicitly declaring Binance Nigeria an illegal entity. The agency emphasized that the exchange lacks regulation and authorization as a platform. While the report does not specify penalties for Binance users, it does caution Nigerian investors against using the exchange, citing potential risks.



Despite the regulatory challenges, Binance has continued its growth efforts. A day after the SEC sued, Binance said it had <a href="https://crypto.news/binance-secures-certifications-in-europe-and-other-jurisdictions/">obtained</a> ISO 27001 and ISO 27701 certifications in Bahrain, France, and the UAE, signaling its commitment to security and privacy practices. At the same time, the exchange has not announced any plans to delist the assets identified as securities by the U.S. SEC. 



Moreover, Binance <a href="https://crypto.news/binance-launches-bitcoin-nfts-amidst-sec-lawsuit/">expanded</a> its NFT Marketplace to support the Bitcoin network on June 6. This expansion enables trading Bitcoin non-fungible tokens (NFTs), or Ordinals, on the marketplace. Binance plans to welcome up to 25 NFT collections on the Bitcoin network.



On June 8, Binance <a href="https://crypto.news/partnership-between-binance-and-taiwan-law-enforcement-aims-to-combat-cyber-threats/">partnered</a> with Taiwan&#8217;s Criminal Investigation Bureau (CIB) through its Global Law Enforcement Training Program. This collaboration aims to provide training to over 200 law enforcement personnel in Taiwan, focusing on combating digital asset-related crimes.



<h2 class="wp-block-heading" id="the-markets-react-to-the-sec-8217-s-complaints">The markets react to the SEC&#8217;s complaints</h2>



The crypto market tumbled within 24 hours after the SEC filed the lawsuit against Binance.&nbsp;



Bitcoin (BTC) particularly slumped by 3.75% in 24 hours, plummeting to a low of $25,753. This drop <a href="https://crypto.news/crypto-liquidations-peak-as-secs-binance-lawsuit-shakes-crypto-markets/">resulted</a> in liquidations to the tune of $103 million. Total market liquidations stood at $297 million, with Binance, OKX, and Bybit recording high values.



However, on June 7, the market <a href="https://crypto.news/global-crypto-market-surges-despite-fud-around-binance/">staged</a> a surprising yet welcomed recovery despite the prevailing FUD surrounding Binance. The global crypto market cap reclaimed the $1.1 trillion mark shortly after dropping below it, surging by nearly 3% to a high of $1.123 trillion. BTC and ethereum (ETH) also increased by 4% and 3.2%, respectively. BTC eventually <a href="https://crypto.news/bitcoin-rebounds-briefly-surges-above-27k/">reclaimed</a> the $27,000 level.



This market-wide recovery was short-lived, as the market collapsed again, leading to record lows for altcoins on June 10. Despite a swift comeback engineered by the bulls, most mainstream assets closed June 10 with losses above 4%. ETH saw a 4.83% decline, while XRP, ADA, and SOL posted losses of 5.82%, 6.91%, and 10.29%, respectively. BTC closed the day with a 2.40% decline.



Amid speculations of the catalysts behind this market-wide decline, Binance CEO Zhao took to Twitter on June 10 to <a href="https://crypto.news/binance-ceo-comments-on-rumors-behind-crypto-market-volatility/">provide</a> clarifications. He called out rumors that Binance had converted its crypto holdings to fiat. Zhao emphasized that this was false, as their fiat reserves have decreased in recent times while crypto reserves have increased.




 
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Bitcoin and global crypto market falls after US SEC sued Binance and Coinbase | Weekly recap

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