Quickly after it was announced on Monday that the Securities and Exchange Commission filed a major lawsuit against Binance, most cryptocurrencies and digital assets-related stocks declined sharply. While Thursday brought another complaint—the one against Coinbase—the price of Bitcoin, and several other cryptocurrencies decisively recovered by the afternoon.
Cryptocurrencies Rally Despite Regulatory Pressure
The price of Bitcoin plummeted on Monday after the SEC revealed its lawsuit against Binance and its CEO, Changpeng Zhao. A similar fate was shared by multiple other digital assets, as well as shares of publicly traded companies within the industry.
While a complaint against Coinbase was revealed on Tuesday, the price of many digital assets noticeably recovered by the afternoon. Bitcoin, which fell to about $25,500 on Monday, rose back above $27,000 on June 6th.
Similarly, many other cryptocurrencies entered into a similar recovery. Ethereum, which, following the news, barely managed to stay above $1,800, rose to close to $1,900. Even Binance’s BNB climbed somewhat on Tuesday and rose to just under $285.
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SEC Broadens Offensive Against Crypto With Complaints Against Binance, Coinbase
While the SEC has been increasingly active in targeting various players in the digital assets industry since the collapse of FTX in November 2022, this week brought two major actions against some of the largest cryptocurrency exchanges in the world.
On Monday, June 5th, the Commission filed a major lawsuit against Binance and its CEO, Changpeng Zhao alleging numerous wrongdoings including the listing of unregistered securities, wash trading, and failing to prevent US-based customers from accessing its international platform.
In response, Binance expressed its disappointment with the Commission saying that its actions are undermining US’ position as a global leader. The exchange also stated it will defend its platform vigorously.
Only a day later, the watchdog also sued Coinbase albeit with a less serious set of charges alleging the offering of unregistered securities. The exchange’s CEO stated that his company is “confident in our facts and the law” and the firm’s official response mostly pointed to its diligent listing process and again highlighted its many attempts to work with the SEC.
Do you think the apparent rally will last despite the regulatory pressure? Let us know in the comments below.
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