Crypto market slumps as US regulatory crackdown spooks investors
Smaller coins led a crypto selloff as a Securities and Exchange Commission crackdown on key digital-asset exchanges unnerved investors.
Tokens including Solana, Cardano and Avalanche posted double-digit percentage declines on Saturday. Bitcoin and Ether, the two largest digital assets, slid more than 3% as of 2:30 p.m. in Singapore.
The SEC earlier this week delivered a double blow to the crypto sector by launching lawsuits against Binance Holdings Ltd., the sector’s largest trading platform, and Coinbase Global Inc., the biggest exchange in the US.
The SEC accused Binance and its founder Changpeng ‘CZ’ Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules.
Binance called the SEC action “disappointing,” saying it had engaged with the agency in good-faith negotiations to settle the matter. The firm has said it intends to defend its platform “vigorously.”
Coinbase has disputed the SEC’s allegation that it’s running an illegal exchange and said it’s prepared to take the legal fight all the way to the Supreme Court.
As part of the lawsuits, some tokens were flagged as unregistered securities, such as Binance’s BNB, Cardano’s ADA and Solana’s SOL, among others. Such a designation comes with strict investor protection rules and could make the tokens harder to trade if exchanges shy away from listing them for fear of falling foul of the SEC.
Robinhood Markets Inc. said it will drop Solana, Cardano and Polygon from June 27.
The BNB token, which can be viewed as arbiter of sentiment toward Binance, fell almost 10% at one point Saturday before paring some of the drop.
