The cryptocurrency industry has been under huge pressure since the price of Bitcoin plunged from its all-time high of $69,000 in late 2021.
A string of alleged frauds, financial contagions, and security breaches, along with the collapse of some high-profile trading and lending platforms, has led to the loss of around $2 trillion in value across the digital asset market.
More recently, the industry has also been facing regulatory pressure from the US Securities and Exchange Commission (SEC) amid increased calls for regulatory clarity in the sector.
Binance and Coinbase, the world’s two largest crypto trading platforms, have been hit with lawsuits by the SEC accusing them of running unregistered securities exchanges and brokerages.
The SEC alleges that Binance and Coinbase are operating without proper registration – violating federal securities law.
“The SEC is now playing whack-a-mole with crypto exchanges,” Ed Moya, senior market analyst at Oanda Corp, a currency trading platform, told Bloomberg in a recent interview.
In the complaint, the SEC accused Binance and Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules.
The commission also accused Binance of encouraging US customers to use VPNs to hide their location and access the main exchange.
Coinbase, which has always claimed to comply with US laws, has also faced SEC scrutiny.
The SEC has accused Coinbase of illegally running a range of financial services, including trading securities and failing to register as a securities exchange.
Some view the SEC crackdown as a necessary step towards bringing clarity to the industry, which has been plagued by a lack of regulation for years.
In an interview last week, Coinbase's chief
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