The price of Bitcoin ( USD-BTC ) dropped to its lowest level in several weeks Tuesday after the US Securities and Exchange Commission said it was suing Binance, a crypto exchange.
Digital assets fell by 10% overnight, reaching lows of $26,625 (PS20), before recovering to about $25,750 at 9am BST.
Coinbase ( COIN), a US-listed crypto stock, closed 9% lower last night.
Binance dominates the crypto exchange market with a significant portion of its trading volume. The lawsuit claims illegal operations in the US, and mishandling customer funds. Since the bankruptcy and failure of rival exchange FTX, crypto has been in the crosshairs of regulators.
The 136 page suit claims that Binance orchestrated an ‘extensive web of deception’, ‘conflicts of interest’, a lack of disclosure and ‘calculated evasion’ of the law.
The article also claims that BNB (Binance’s exchange token) and other crypto assets such as SOL and MATIC are securities.
Binance said that it would vigorously defend itself against any claims of wrongdoing. It claimed to have engaged with the regulator and sought to cooperate.
In a press release, it stated that ‘Unfortunately the SEC’s unwillingness to engage in productive dialogue with us is yet another example of the Commission’s misguided, conscious refusal to provide clarity and guidance much needed by the digital asset sector’.
Although it may sound like bitcoin’s price has dropped dramatically, there have been worse days in this year. The price of bitcoin started the year at $16,600, but it plummeted in the aftermath of FTX bankruptcy.
On Tuesday morning, ether ( , ETH-USD), was also down approximately 3% and hovered just above $1800.