By James Davis
All the top ten cryptocurrencies posted losses this week following news that the United States Securities and Exchange Commission (SEC) had leveled charges against top crypto exchanges Binance and Coinbase. The regulator accused the two companies of operating unlicensed securities exchanges.
According to CoinMarketCap data, Bitcoin decreased by 5.54% over the past seven days. As of this writing, the largest cryptocurrency by market valuation is trading for $27,753. Ethereum, on the other hand, is currently priced at $1,744 after recording a 7-day loss of 8.3%.
Meanwhile, Binance’s BNB plummeted 24% this week, hitting $235.14 for the first time since last December. The token was deemed as security in SEC’s Binance lawsuit. Other cryptocurrencies labeled as securities, including Cardano, Polygon, and Solana, posted losses of more than 30%.
The top thirty crypto assets that declined by between 20% and 30% include Avalanche, which shed 21.7% to $11.54; Shiba Inu, which dropped by 23.4% to $0.00000662; Cosmos Hub, which plunged 23.8% to 8.24; Uniswap, which lost 20.7% to $4.04; Litecoin, which fell 20.3% to $77.57; and Internet Computer, which depreciated by 24.2% to $3.66.
It is important mentioning that except for tomiNet, which recorded a 7-day rally of 3.8%, all unbacked cryptocurrencies in the top hundred by market cap saw their values depreciate this week.
Binance Responds to SEC’s Lawsuit
On Monday, hours after the SEC had announced its enforcement action against Binance, the crypto exchange responded to the agency, saying that it was disappointed by the commission’s move. Binance claimed that the SEC had declined requests to engage with the company and continuously refused to provide regulatory clarity to crypto players.
The crypto exchange added that the recent SEC’s moves are undermining the US “global hub for technological innovation” status.
Binance comments were supported by Republican Warren Davidson, who called out the SEC for leveling enforcement actions against crypto companies based on an unclear regulatory framework. In April, Davidson said he would soon introduce a proposal seeking the removal of SEC chair Gary Gensler from office.
On Tuesday, Gensler was featured in a CNBC interview, where he claimed that most crypto players like being non-compliant. He added that the United States didn’t need crypto.
That day, the SEC, along with agencies from Illinois, California, New Jersey, Vermont, Wisconsin, Washington, Maryland, Alabama, and Kentucky, jointly charged Coinbase with alleged violation of securities rules. The news caused the company’s stock COIN, to decline by over 19%.
Coinbase Legal Officer Responds to SEC’s Lawsuit
When the regulators announced the charges, Paul Grewal, Coinbase’s Chief Legal Officer, was speaking at Digital Asset Market Structure Discussion Draft (DAMSDD) event in Washington DC. Grewal said he was disappointed with the agencies but wasn’t surprised. He then requested Congress pass a bill providing a clear regulatory framework for crypto.
Tuesday was a busy day for the SEC. Besides charging Coinbase, the agency moved to Court to request permission to take custody of Binance.US assets, accusing the exchange of commingling user funds through collapsed banks Silvergate and Signature.
Later that day, Binance.US announced its plan to delist more than thirty cryptocurrencies paired to USDT. The move comes amid increased scrutiny over reserves backing the Tether-issued stablecoin.
Further, the trading platform also announced it had halted the USD withdrawals and deposits as it aimed to become a ‘crypto-only’ exchange.
On Wednesday, the US Court of Appeals delivered its verdict on the petition filed by Coinbase last July to the SEC, requesting the agency to clarify its regulations regarding securities. Judge Cherky Ann Krause directed the SEC to disclose its position by the end of next week on whether it will deny or grant Coinbase’s petition.
Finally, on Friday, it became public knowledge that Gensler was willing to provide advisory services to Binance back in 2019. The company’s lawyers alleged that the SEC Chair had multiple conversations with Binance CEO Changpeng Zhao before securing his current job at the agency.