The crypto market’s price movement remains bearish as investors and businesses consider the implications of the SEC’s accusations against Binance and Coinbase exchanges.
The litigation have also had an impact on the decentralized financial (DeFi) markets, limiting total liquidity, and most analysts predict that more pain is on the way.
On June 5 and 6, the US Securities and Exchange Commission filed civil actions against Binance and Coinbase, two of the largest centralized cryptocurrency exchanges. The SEC contends that 61 different cryptocurrencies worth $100 billion are securities.
Algorand was one of the 61 crypto tokens identified, a token that Gensler hailed a “great technology” in 2019, which appears to contradict this recent enforcement action.
BUSD , BNB , SOL , ADA,MATIC,FIL,ATOM,SAND ,MANA, AXS. Since the lawsuit, the enforcement efforts have reduced liquidity at Binance.US by 78%.
Aside from decreased liquidity, Binance exchange observed significant balance drops in stablecoins, BTC, and Ether. Since June 5, stablecoin balances have fallen by more than 20%.
The announcement caused Robinhood to delist three of the tokens listed as securities by the SEC. Robinhood has given users until June 26 to withdraw their funds or face being forced to liquidate them. This indicates that over $1 billion may be sold between the three coins in under two weeks.
The current SEC move adds to a lengthy history of disagreements, misunderstandings, and mistrust regarding the actual use case of digital assets. Following the FTX collapse, some believe US lawmakers are unhappy with the crypto business. The most current conflict is over how centralized exchanges can use customer funds.
To date, crypto values remain heavily associated with the Dow and S&P 500, and most big banks continue to forecast a sharp recession in the United States sometime in 2023. This hasn’t stopped major stock indices from setting new yearly highs in the aftermath of the US debt ceiling agreement.
The SEC’s assault is expanding the divide between stocks and Bitcoin. Since the complaint, digital asset investment products have seen over $88 million in withdrawals.