Cryptocurrencies Crash After the SEC Charges Binance With Sale of Unregistered Securities

The SEC on Monday charged the crypto exchange and its CEO Changpeng Zhao with violating a number of securities laws.

AccessTimeIconJun 5, 2023 at 4:55 p.m. UTC
Updated Jun 5, 2023 at 11:02 p.m. UTC

Altcoins are suffering the largest losses following the SEC’s lawsuit against Binance and its CEO Changpeng “CZ” Zhao.

Among the allegations are that the exchange offered a number of unregistered securities to the general public, among them not just Binance’s BNB token and its BUSD stablecoin, but also Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI), Algorand (ALGO), Axie Infinity (AXS), Filecoin (FIL), Cosmos (ATOM), Sandbox (SAND) and Decentraland (MANA).

The entire cryptocurrency market is in the red on the news, including declines of 5%-10% in most of the above tokens.

Asked about possible regulatory implications for Sky Mavis, the developer of popular play-to-earn game Axie Infinity, CEO Aleksander Leonard Larsen said they are "looking into it" and noted that "it doesn't change much. We are staying the course, building our products."

Polygon declined to comment on the situation and none of the other tokens could be reached for comment at the time of publication.

Crypto tokens deemed as securities by the SEC (Lyllah Ledesma/Messari)
Crypto tokens deemed as securities by the SEC (Lyllah Ledesma/Messari)

The world’s largest cryptocurrency by market cap, bitcoin (BTC) was recently down 5% to trade at $25,800. Ether (ETH) is down 4.5% to $1,811.

Eliza Gkritsi, Margaux Nijkerk and Brad Keoun contributed to the reporting of the story.

UPDATE (June 5, 20:00 UTC): Adds comments from Sky Mavis and Polygon.

Edited by Stephen Alpher.


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Lyllah Ledesma

Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.