US Tightens Grip on Virtual Assets...Coinbase Sued Following Binance (Comprehensive)

SEC "Unregistered Brokerage Role"
Binance and CEO Sued the Day Before
Coinbase Down 20% in Two Days... Accelerated Crypto Outflows
Bitcoin and Ethereum Rise

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against the cryptocurrency exchange Coinbase. This comes just one day after filing a lawsuit against Binance, the world's largest cryptocurrency exchange. As U.S. regulators intensify their crackdown on cryptocurrency regulation, it has been revealed that cryptocurrencies are rapidly being withdrawn from both Binance and Coinbase.

On the morning of the 6th (local time), the SEC announced that it had filed a lawsuit against Coinbase in the U.S. District Court in New York, alleging that the company acted as an unregistered broker-dealer.

In the complaint, the SEC pointed out that Coinbase has earned billions of dollars through handling cryptocurrencies since at least 2019 but violated securities laws by evading disclosure obligations meant to protect investors. The SEC determined that at least 13 cryptocurrencies available to Coinbase customers qualify as "crypto securities" under federal regulations, and therefore Coinbase is subject to federal securities laws. However, the core of the complaint is that Coinbase knowingly violated federal law. SEC Chair Gary Gensler criticized on Twitter, saying, "Coinbase did not comply with the relevant laws. It deprived investors of critical protections that could prevent fraud and manipulation."

This action came the day after the SEC filed a lawsuit against Binance and its founder and CEO, Zhao Changpeng, in the U.S. District Court in Washington, D.C., for securities law violations. Binance is accused of profiting unfairly by using customer assets. The SEC stated in the complaint, "Binance and CEO Zhao used billions of dollars of customer assets to gain profits but exposed customer assets to significant risks." The SEC also alleged that Binance had meticulously planned these actions in advance to evade legal scrutiny.

After filing lawsuits against Binance and Coinbase consecutively, the SEC also requested the U.S. District Court for the District of Columbia to freeze Binance's assets within the United States that same night. If the U.S. court grants the SEC's request, assets deposited, held, or traded by customers on the Binance platform will be forcibly frozen. However, the asset freeze will only apply to two Binance companies in the U.S. and will not affect exchanges outside the U.S. The freeze is expected to target dozens of accounts within the U.S.

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The market has evaluated the consecutive lawsuits against Binance and Coinbase by U.S. financial authorities as a significant tightening of related regulations. Since moving from Goldman Sachs to the SEC two years ago, Chair Gensler has repeatedly warned that cryptocurrency exchanges and crypto companies might violate federal laws and has signaled regulatory strengthening.

Binance is facing comprehensive regulatory pressure not only from the SEC but also from other U.S. authorities. In March, the U.S. Commodity Futures Trading Commission (CFTC) launched an investigation into Binance and CEO Zhao Changpeng for alleged regulatory violations. The Department of Justice is also investigating Binance for alleged involvement in money laundering.

Public opinion is also unfavorable toward cryptocurrency exchanges. Since the bankruptcy of FTX, the world's third-largest cryptocurrency exchange, in November last year, calls for stricter cryptocurrency regulations have been growing worldwide.

Following the announcement of regulatory actions, funds have been rapidly withdrawn from Binance and Coinbase. According to cryptocurrency data firm Nansen, as of 11 a.m. that day, a total of $1.43 billion in cryptocurrencies ($1.34 billion from Binance and $70.8 million from its U.S. affiliates) had been withdrawn. Coinbase saw outflows of $1.28 billion. After the SEC's lawsuit against Binance the previous day caused Binance's stock price to drop 9%, Coinbase's stock fell more than 12% following the SEC's lawsuit against it that day.

On the other hand, cryptocurrency prices have shown an upward trend. This is analyzed as a positive interpretation of the regulations on digital assets, as the negative news had already been reflected the previous day. As of 9:22 a.m. that day, Bitcoin was trading at $27,195, up 5.78% from the previous trading day. Ethereum was also up 4.02%, trading at $1,884.07.

This content was produced with the assistance of AI translation services.