Bitcoin stabilizes above $25,000 as Binance SEC lawsuit rattles investors

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SINGAPORE, June 6 (Reuters) – Bitcoin stabilized above $25,000 on Tuesday after falling sharply overnight as investors grappled with news that the U.S. securities regulator had sued crypto exchange Binance, dealing a severe blow to the industry.

Bitcoin, the world’s largest cryptocurrency, was last at $25,797, up 0.2% in Asian trade on Tuesday, pinned near a more than two-month low. It had fallen more than 5% in the previous session, the biggest daily drop since April 19.

The U.S. Securities and Exchange Commission on Monday sued Binance, the world’s largest cryptocurrency exchange, and its CEO Changpeng Zhao for secretly controlling Binance.US as part of a “deception ring” to escape to U.S. laws, among other charges.

“This is yet another blow to the crypto industry and crypto exchanges around the world,” said Tony Sycamore, market analyst at IG Markets.

“If what (the SEC) claims is true…well, Binance is the biggest, and if it happens to the biggest, what happens to the smallest? That’s the natural link. does not fill investors with confidence.”

Binance’s cryptocurrency was at an almost three-month low at $277.07, after falling 9.2% on Monday.

Reuters reported earlier that Binance controls the bank accounts of its US subsidiary, despite claiming to be independent.

In statements, Binance said it cooperated with SEC investigations and “worked hard to answer their questions and address their concerns,” including trying to reach a negotiated settlement.

Binance’s 24-hour trading volume soared in hours in Asia on Tuesday and more than doubled to $12.48 billion, according to analytics site CoinMarketCap.

The Binance lawsuit marks the latest development in the SEC’s sweeping crackdown on the crypto industry following last year’s FTX implosion, which has since prompted some crypto firms to increase compliance measures , to increase revenue and expand outside of the United States.

“This case is significant, and the crypto and fintech industries should pay close attention to its impact,” said Wayne Huang, co-founder and CEO of XREX Inc, a blockchain-enabled financial institution operating the XREX USD to crypto exchange.

Reporting by Rae Wee in Singapore and Kevin Buckland in Tokyo; Editing by Sonali Paul

Our standards: The Thomson Reuters Trust Principles.

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