Cryptocurrency Prices Plummet as SEC Files Lawsuits Against Binance and Coinbase—Certain Coins Removed from Sale

Cryptocurrency Prices Plummet as SEC Files Lawsuits Against Binance and Coinbase—Certain Coins Removed from Sale

The cryptocurrency market has experienced significant volatility due to recent regulatory measures implemented by the Securities and Exchange Commission (SEC). These actions have had a wide-reaching impact, affecting both the cryptocurrency industry as a whole and specific coins in particular. Notably, Binance and Coinbase, two prominent crypto-exchange companies, currently face legal proceedings. Additionally, other exchanges are also grappling with the consequences.

Additionally, as a direct result of the SEC’s actions, certain cryptocurrencies have been delisted from multiple trading platforms. This happened due to potential legal ramifications. Consequently, the availability of these coins for trading is facing restrictions, presenting further challenges to the cryptocurrency industry.

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Cryptocurrency Prices Experience Decline Amid SEC’s Legal Actions Targeting Binance and Coinbase

Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), attentively listens during a meeting held at the U.S. Treasury Department in Washington, D.C. on October 03, 2022. The Treasury Department’s Financial Stability Oversight Council organized the meeting. It covered various subjects, including climate-related financial risk and the recent Treasury report on the utilization of cloud services in the financial sector.

According to a recent CNBC report, the cryptocurrency market has experienced a decline in value. This has impacted the entire industry’s operations at present. This comes as a surprise, as experts anticipated 2023 to be a year of resurgence for the crypto market. Experts expect leading coins like Bitcoin and Ethereum to rally. However, these top coins have suffered significant drops of up to five percent as the week draws to a close.

The primary driver behind this market downturn is attributed to the Securities and Exchange Commission’s (SEC) crackdown on Binance and Coinbase. These two prominent cryptocurrency exchanges are facing regulatory challenges. The actions taken by the SEC have had a profound influence on the market sentiment. It has also contributed to the current situation.

Certain Cryptocurrencies Cease Trading to Mitigate Lawsuit Risks

Furthermore, the SEC’s regulatory crackdown has had a ripple effect. It leads to other companies discontinuing the sale of certain coins classified as “crypto asset securities” by the SEC. Robinhood, for instance, has recently made an announcement regarding the removal of three coins from its platform. Those three coins are namely Cardano, Polygon (MATIC), and Solana.

Trading activities for these coins have ceased on the platform. However, Robinhood assures its users that other coins remain unaffected and will continue to operate as usual. Another notable development in response to the regulatory climate is the decision by to shut down its US institutional exchange.

This move by reflects the wider impact of the SEC’s actions on the cryptocurrency industry. It prompted companies to adjust their operations accordingly.

Crypto’s Problems

Despite the challenges faced by the cryptocurrency industry, there remains a significant number of steadfast supporters who continue to rally for the cause. Over the past few months since the beginning of 2023, efforts have been made to boost coin prices following a substantial decline experienced in the previous year. However, prominent tech investor Chamath Palihapitiya has recently expressed a pessimistic view, declaring that “crypto is dead in America,” attributing this sentiment to the ongoing regulatory crackdowns.

One notable case receiving widespread attention is the legal battle between Coinbase and the SEC. The regulatory agency is actively pursuing legal action against the operations of this prominent cryptocurrency exchange company. These high-profile cases serve as a reminder of the regulatory scrutiny faced by crypto companies in the United States.

Coinbase’s shares have experienced a significant decline of up to 15 percent following the SEC’s warning, thereby impacting its operations considerably. However, it is not only Coinbase that is grappling with regulatory issues; several other companies, including Binance, have also encountered similar challenges.

As a result of increased regulations and the potential for lawsuits, various crypto companies have decided to halt the trading of four specific coins. These coins lack the necessary registered securities and licenses, leading to their suspension. The ongoing regulatory crackdown indicates a sustained decline and suggests that the pressure is unlikely to ease soon.

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