Topline
Investors reportedly pulled out roughly $790 million from crypto exchange firm Binance and its U.S. affiliate over the past 24 hours after the U.S. Securities and Exchange Commission sued the company—and threatens a similar fate for Coinbase, another crypto giant sued by the SEC Tuesday.
Binance CEO Changpeng Zhao was sued along with his company by the SEC.
Key Facts
Investors have pulled almost $779 million in crypto tokens from Binance, the world’s largest crypto exchange, and $13 million worth from its U.S. affiliate, Binance.US, since the SEC filed its lawsuit Monday morning, according to a report from data firm Nansen.
Binance’s cryptocurrency coin’s stock plummeted from $299 per share to $279 in the last two hours before market close on Monday, and has dropped a total of 10% in the past five days.
Forbes reached out to Binance and Binance.U.S. for comment.
Key Background
The SEC’s lawsuit accused Binance and its CEO Changpeng Zhao of 13 charges, including that the company artificially inflated trading, operated an unregistered securities exchange and misled investors about its market surveillance controls. It also alleges Binance kept investors’ money in one big pool, allowing them to divert some funds, rather than keeping accounts separate, as is mandated by U.S. law. In a blog post Monday, Binance said it was “disappointed” by the lawsuit and had “actively cooperated” with the SEC’s investigations.
What To Watch For
On Tuesday morning, the SEC filed another lawsuit, this time against California-based Coinbase. The SEC claimed Coinbase had been operating its crypto trading platform as an unregistered broker, and alleged it made its billions of dollars “unlawfully.” In less than an hour after the lawsuit was announced, Coinbase’s stock fell more than 16%.
Big Number
120 million. That’s how many registered users Binance has globally, according to its website. Coinbase has roughly 56 million users.
Further Reading
SEC Charges Binance With Dodging Regulation While Piling Up Billions Of Dollars (Forbes)
SEC Sues Coinbase—Alleges Crypto Trading Platform Operated As Unregistered Exchange Since 2019 (Forbes)
Binance’s Token BNB Plummets Almost 10% In Biggest Drop This Year After SEC Sues Crypto Giant (Forbes)
Binance Bites Back At Some SEC Charges But Fails To Address ‘Tai Chi Plan’ (Forbes)
Source: https://www.forbes.com/sites/katherinehamilton/2023/06/06/binance-out-790-million-as-investors-move-assets-after-sec-lawsuit-research-firm-reports/