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- Binance’s dominance waned after the SEC lawsuit.
- Legal battles and market shifts cast shadows on Binance’s future.
In the realm of cryptocurrency, Binance [BNB] once reigned supreme as the leading centralized exchange. Yet, the tides turned when an SEC lawsuit triggered a drastic decline in the exchange’s activity, casting a shadow of doubt over the exchange’s future.
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Altcoin takes an alternate route
The aftermath of the SEC legal action witnessed a notable shift. The market share for security-labeled altcoins plunged on Binance, while remaining steady on U.S. exchanges. This transition opened doors for offshore platforms like Poloniex and Huobi, showcasing a massive surge in their growth trajectory.
Amidst the storm, Binance continued to hold the lion’s share of Bitcoin reserves, a position closely trailed by Coinbase and Bitfinex. This resilient stance in Bitcoin holdings signals that the exchange might persevere despite the challenges.
However, signs of turbulence extend further. Binance Connect, an initiative rolled out in March 2022 to enable businesses to embrace cryptocurrency payments, has now shuttered its operations. The once-promising service, designed to foster crypto adoption, closed its doors just a year after its launch, despite initially supporting 50 cryptocurrencies and major payment methods.
Legal battles compounded Binance’s woes. The SEC-Binance civil case took an intriguing turn recently. A federal judge overseeing the proceedings has referred a motion for a protective order to Magistrate Judge Zia Faruqui.
This motion, requested by Binance.US’ legal team, seeks to shield against what they deem the SEC’s excessive information requests during the discovery process.
Former SEC Internet Enforcement Chief John Reed Stark had anticipated this move, emphasizing the tendency for overreaching requests in large financial investigations.
As predicted, Judge Jackson referred Binance’s motion for a protective order to D.C. Magistrate Judge Faruqui for resolution. pic.twitter.com/TpROC3Ybrc
— John Reed Stark (@JohnReedStark) August 16, 2023
The order was due to the SEC’s quest for specific data from Binance.US pertaining to custody, security, and user assets. Binance.US had contested the relevance of this data to the SEC’s case concerning unregistered securities offerings filed in June.
Simultaneously, Binance and its CEO Changpeng Zhao are navigating a lawsuit from the Commodity Futures Trading Commission (CFTC), having moved to dismiss it in July. Furthermore, the U.S. Department of Justice has reportedly embarked on an investigation into Binance’s potential involvement with Russian entities.
Realistic or not, here’s BNB’s market cap in BTC’s terms
As the legal saga unfolds, the state of the BNB token emerges as a reflection of the stormy waters. The BNB token valiantly defended the $230 price level, an endeavor it embarked on for the fifth time in roughly eight months.
Notably, the token’s trading volume surged amid the tumultuous circumstances, underscoring the dynamic landscape surrounding the exchange’s future.