Binance Coin (BNB) is up by 2.7% following Binance CEO’s statement.
Prominent cryptocurrency exchange Binance has become a rumor magnet after a recent report suggested that Binance had sold Bitcoin to boost Binance Coin’s price. The rumor has been widely spread on social media amid the tension between the U.S. Securities and Exchange Commission (SEC) and the crypto giant.
Binance was hit hard by the SEC’s complaint filed on June 5, 2023. Consequently, Binance’s native coin (BNB) experienced a significant price drop, falling from over $300 to around $225.
Binance Allegedly Manipulated BNB Price
On June 14, 2023, BNB stabilized around $250. The slight surge fueled viral rumors that Binance sold bitcoins for USDT stablecoins, which were then used to purchase BNB. Some versions of the rumor claim that Binance later sold these acquired BNB tokens for BUSD stablecoins.
In a swift response to the rumors, Binance CEO Changpeng Zhao firmly asserted that Binance didn’t sell any BTC or BNB. According to CZ’s statement, Binance still holds FTT, despite rumors suggesting its potential liquidation and the subsequent collapse of FTX.
However, some individuals remain skeptical and have urged CZ to provide concrete evidence to substantiate the claim that no coins have been sold. It’s not the first time Binance has faced accusations of asset sales.
Last week, a Twitter user scrutinized Proof-of-Reserves data on Binance and discovered a significant decrease in the exchange’s assets during May 2023. In response, Changpeng Zhao refuted the speculations surrounding asset liquidation.
Alternatively, Binance announced a strategic collaboration with Tether on June 12. The partnership aims to facilitate the conversion of 750 million USDT from TRON to Ethereum, meeting the withdrawal demands of its users.
Temporary Settlement with the SEC
Binance.US and the SEC appeared before a federal judge in Washington, D.C., on June 14, seeking clarification on whether Binance.US should freeze its holdings on the exchange.
In a recent development, the judge instructed Binance.US and the SEC to engage in self-negotiation and work towards a mutually agreeable solution that allows Binance.US to continue its operations while ensuring the security of customer assets.
Emphasizing the potential repercussions of a complete freeze, the judge stated that an injunction would not be necessary if Binance.US could guarantee control over $2.2 billion in customer funds.
Echoing this sentiment, Binance.US expressed concerns that such a freeze could effectively spell the end of its operations and also impact the broader cryptocurrency market.
The SEC’s lawsuit against Binance includes a total of 13 charges. One allegation claims that funds from Binance and Binance.US were commingled in an account controlled by Merit Peak Limited, which has ties to Changpeng Zhao, the founder of Binance.
Apart from that, the exchange allegedly conducted money laundering transactions through a secret Market Maker (MM) called Sigma Chain, owned by CZ. Consequently, the SEC has filed an application with the court, seeking an asset freeze on Binance.US.
Coinbase, another prominent cryptocurrency exchange, faced a similar lawsuit by the SEC just a day after the Binance case. Subsequently, more than 61 coins were classified as securities by the SEC, causing significant turbulence in the cryptocurrency market.
As a consequence of these legal challenges, Binance.US encountered issues such as delisting 102 sport trading pairs from its Advanced Trading interface and halting OTC services. Binance released a statement expressing its objections and affirmed its readiness to contest the SEC’s lawsuit while ensuring compliance with U.S. regulations.
According to the latest news, Binance is seeking to withdraw from the Cyprus market. The Cyprus SEC approved Binance Cyprus’ operation as Crypto Service Provider in October last year.
The crypto markets are changing, and the offering to consumers are falling. We will see hoe much they fall before they find a floor.