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Bitcoin Plunges Below $26,000 As SEC Sues Binance


Written by:

Gregory Gosson

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The price of bitcoin has plunged to its lowest point since March following a lawsuit from the Securities and Exchange Commission (SEC) in the United States against Binance, the largest digital asset exchange in the world.

Why Is The SEC Suing Binance?

The SEC has accused Binance of committing several offenses that amount to avoiding regulations in the U.S. market, misrepresenting their activities, and endangering their investors’ assets.

Binance and founder Changpeng Zhao are accused of:

  • Advising high-value U.S. clients on how to circumvent Binance’s own restrictions on operating in the U.S. market;
  • Secretly controlling Binance.US behind the scenes, despite it officially being separate from;
  • Exercising control of customers’ assets, allowing them to mix or divert their assets to Sigma Chain, another entity owned and controlled by Zhao;
  • Concealing the fact that billions of dollars in investors’ assets were being sent to another Zhao-owned third party, Merit Peak Limited;
  • Engaged in manipulative trading through Sigma Chain to artificially inflate the platform’s trading volume;
  • Operating unregistered national securities exchanges, broker-dealers, and clearing agencies;
  • Unregistered offering and selling of Binance’s own digital assets (BNB and BUSD), digital asset lending products, and a staking-as-a-service program.

The lawsuit amounts to a total of 13 separate charges and argues that Binance was fully aware of its wrongdoing and actively attempted to forestall regulatory intervention.

How Has Binance Responded?

Changpeng Zhao responded to the allegations by arguing that the SEC was only harming the United States as a place to do business within the digital asset world.

According to the Binance CEO, the Commission should instead have taken a “thoughtful, nuanced approach” as opposed to the “blunt weapons of enforcement and litigation.

In a scathing attack on the SEC, Zhao argued that the “goal here was never to protect investors… instead, [it] appears to be to make headlines.”

He also demonstrated a genuine ambivalence towards the legal battle facing him and his company, making the case that “because Binance is not a U.S. exchange, the SEC’s actions are limited in reach.”

Binance called the accusations “baseless“, although evidence has been surfacing for some time that they may in fact have plenty of merit.

Reuters has previously released two reports that highlighted illegal activity and dishonest business practices from the digital asset exchange company.

Indeed, evidence has surfaced that Binance was well aware that they were not playing by the rules, with internal messages confirming “we are operating as a fking unlicensed securities exchange in the USA.”

Not only this, but they deliberately attempted to slow enforcement down by complicating the methodology of categorizing securities.

How Has This Affected Bitcoin?

Whilst altcoins have generally suffered the largest losses, the price of bitcoin has dropped below $26,000, its lowest since March 2023.

$27,000 had been the support up until this point, but with that shattered, future price action could be difficult to predict.

There has been disappointment among Bitcoiners that the lawsuit has affected the price of bitcoin since laymen are apparently unaware of the delineation between bitcoin and altcoins.

A common saying amongst Bitcoiners is “bitcoin not crypto,” which seeks to disentangle the world’s leading decentralized currency from the thousands of altcoins that make up the rest of the cryptocurrency industry.

The vast majority of these are pump-and-dump schemes, and none are decentralized, sound money digital currencies like bitcoin.

Bitcoin is the only digital asset with intrinsic value, decentralized in nature, and with the potential to fix the monetary system of the world.

However, a layman does not necessarily understand that bitcoin does not belong in the same category as other digital assets.

There are calls to put a greater emphasis on educating people, including governments, about Bitcoin’s lone status as the only digital commodity.

If this is successful, the price of bitcoin may well be impervious to legal battles such as this, which don’t in any way affect the asset’s utility or security.

When the world knows that bitcoin stands alone, its price may decouple from that of the altcoins.

Only then can it take its place as the world’s true reserve asset.

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