Binance gets caught up in one court case filed by the US Securities and Exchange Commission (SEC), a heavy blow to BNB, the token issued by Binance. The allegations against the crypto exchange suggest its involvement in illegal activities, especially multiple violations of securities laws.
Consequently, the impact of these allegations manifested itself as a substantial stock market outflow, prompting Changpeng Zhao, the CEO, to reveal an astonishing figure of over $392 million in net outflows in the past 24 hours. It is worth noting that Binance has experienced significant outflows before, indicating a history of navigating such challenges.
According to our records, last 24 hours, @Binance the net outflow is about $392 million.
Our wallet addresses are public. Some third-party analytics measure change in AUM (assets under management) in USD equivalent as outflows. This includes crypto price declines (which lower AUM) as “outflows”.…
— CZ
Binance (@cz_binance) June 10, 2023
Meanwhile, in the wake of the SEC filing, Nansen data indicates that Binance witnessed a staggering amount of nearly $3 billion in outflows. The aftermath of the recent lawsuit has sent BNB down in value. Coingecko reports that the token has experienced a drastic fall of more than 23% in just a week.
Source: Nansen
Binance vs. The SEC: What’s the Essence?
According to the officially SEC press release, the company and 13 other entities are being charged with operating an unregistered exchange and mixing client funds through companies associated with Binance.
The regulatory body also alleges that Binance was aware of the regulations regarding exchanges and securities, but chose to ignore those laws, putting investor funds at risk just to maximize profits.
They also pointed to the sale of unregistered securities. The SEC is targeting the company’s “Simple Earn” and “BNB Vault” crypto lending products. These products are part of Binance’s staking service and, with the SEC’s recent crackdown on staking services, are considered securities by the regulator.
BNB market cap currently at $36.6 billion on the weekend chart: TradingView.com
The SEC also focused on Binance’s failure to limit the exchange’s services to US citizens. In March alone, the Commodity Futures Trading Commission (CFTC) supposedly that the company violates various financial laws, including those designed to stop money laundering. The SEC also noted that Binance misled customers through “strategic and targeted wash trading.”
BNB has yet to make a comeback
Since then, BNB has been the only altcoin that has not recovered from the general market downturn. However, analysts are still somewhat bullish in the currency’s short-term capacity, despite the recent market slippage.
Source - Coingecko
At the token’s current price of $235, BNB bulls would need to defend the $234 support level to reach higher highs in the near term, as long as no bearish news hits the market. But right now, it looks like the weight of the bears will defeat any attempt at a bullish breakout.
However, if the bulls can defend this level of support, a return to the $300 price is possible. Despite the optimism in the market, the developments in the lawsuit will certainly affect BNB in the long term.
Featured image of Protos
