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Crypto Traders Suffer $320M Losses in Liquidations as SEC Lawsuit Against Binance Spurs Market Plunge

Crypto Traders Suffer $320M Losses in Liquidations as SEC Lawsuit Against Binance Spurs Market Plunge

Crypto Traders Suffer $320M Losses in Liquidations as SEC Lawsuit Against Binance Spurs Market Plunge

Cryptocurrency prices nosedived Monday as the U.S. Securities and Exchange Commission (SEC) sued the crypto exchange and its chief executive for multiple federal securities law violations.

Cryptocurrency prices nosedived Monday as the U.S. Securities and Exchange Commission (SEC) sued the crypto exchange and its chief executive for multiple federal securities law violations.

Cryptocurrency prices nosedived Monday as the U.S. Securities and Exchange Commission (SEC) sued the crypto exchange and its chief executive for multiple federal securities law violations.

AccessTimeIconJun 5, 2023, 10:29 PM
Updated Jun 6, 2023, 1:39 PM
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Cryptocurrency traders suffered some $320 million of losses in liquidations over the past 24 hours, data by CoinGlass showed, as crypto prices plummeted Monday after the Securities and Exchange Commission (SEC) sued exchange giant Binance for allegedly violating securities laws.

Some $289 million of long positions – traders who bet on prices to rise – were wiped out during the day, marking the largest level of long liquidations in at least three months, per CoinGlass.

Crypto liquidations per day (Coinglass)

Crypto markets nosedived Monday following the SEC suit accusing Binance, the world’s largest crypto exchange by trading volume, and its chief executive, Changpeng “CZ” Zhao, of offering unregistered securities, commingling user deposits and inflating trading volumes.

Tokens cited in the lawsuit as unregistered securities – Binance’s BNB, Solana's SOL, Cardano's ADA among others – led the decline, dropping as much as 10% over the day. Bitcoin (BTC), the largest cryptocurrency by market capitalization, fell below $26,000 for the first time since mid-March, according to the CoinDesk Bitcoin Price Index (XBX).

The large amount of liquidations suggest that the sudden drop in prices caught most investors off-guard. Altogether, nearly 119,000 crypto traders were liquidated in 24 hours, per CoinGlass.

BTC traders booked most of the losses, almost $119 million. Ether (ETH) investors suffered $41 million of losses as the token’s price dipped below $1,800. Some $6.5 million of BNB trading positions were wiped out as the token fell sharply.

Binance traders suffered $105 million of losses, the most on any of the exchanges, followed by $88 million of losses on OKX and $43 million on ByBit, according to CoinGlass.

Edited by James Rubin.

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.


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