First Mover Asia: Why Did Bitcoin Fall to $25.4K? SEC Lawsuit Against Binance Rocks Crypto Markets

ALSO: Lido’s stETH token has become the seventh largest token by market cap, right ahead of Cardano and just behind XRP, according to data from CoinGecko.

AccessTimeIconJun 6, 2023 at 12:18 a.m. UTC
Updated Apr 14, 2024 at 10:20 p.m. UTC

Good morning. Here’s what’s happening:

Prices: Bitcoin tumbled to $25.4K at one point after the SEC sued crypto exchange giant Binance. Will markets rebound?

Insights: stETH's market cap is now the seventh largest among digital assets. What's behind the move and will it last?


−54.3 4.6%
−1337.8 4.9%
−75.9 4.0%
S&P 500
−8.6 0.2%
+25.7 1.3%
Nikkei 225
+693.2 2.2%
BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)
CoinDesk Market Index (CMI)
1,132 −54.3 4.6%
Bitcoin (BTC)
$25,752 −1337.8 4.9%
Ethereum (ETH)
$1,812 −75.9 4.0%
S&P 500
4,273.79 −8.6 0.2%
$1,978 +25.7 1.3%
Nikkei 225
32,217.43 +693.2 2.2%
BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

SEC lawsuit has crypto markets reeling

The crypto industry’s latest blow rocked digital asset prices on Monday.

Bitcoin was recently trading at about $25,750, down nearly 5% over the past 24 hours. Much of its initial downturn occurring in the two hours after the Securities and Exchange Commission (SEC) filed suit against Binance, accusing the exchange giant of violating securities laws. The largest cryptocurrency by market capitalization treaded comfortably above $27,000 for much of the past week, but the allegations against Binance rekindled fears about industry integrity and the intent of regulators to exert more control over exchanges. Binance – and other exchanges – have been facing regulatory scrutiny for years.

“The Binance news obviously led to a big sell-off, but the news itself wasn’t exactly surprising,” Bob Ras, co-founder of Sologenic, a blockchain-powered network for tokenizing securities, told CoinDesk. “Rumors had been swirling for some time about forthcoming action against Binance.”

But Ras added that he wasn’t convinced “that we are going to experience massive liquidations,” similar to those following the 2022 implosions of Luna, Celsius and FTX. “Back then, we saw a great many forced sellers. I don’t think there are nearly as many forced sellers now as there were back then. I suspect that we’ll likely be in for a gradual recovery here.”

Ether also tumbles

Ether, the second largest crypto in market value, was recently changing hands below $1,800, off more than 5% from Sunday, same time. ETH and other major altcoins followed a similar path as bitcoin did on Monday with the bulk of their declines coming in the immediate hours after the SEC suit. BNB, Binance’s exchange token, and SOL, the native cryptocurrency of the Solana blockchain, recently plunged more than 10%. ADA and MATIC, the tokens of smart contract platforms Cardano and Polygon respectively, and popular meme coin DOGE were recently off more than 8%. Even litecoin, which has been rallying the past few weeks, fell more than 9%. The SEC suit called those tokens unregistered securities.

The CoinDesk Market Index, a measure of crypto markets performance, was down more than 6%. All six sectors that compose the Index, including DeFi, computing and culture and entertainment stumbled into negative territory. The crypto Fear & Greed Index remained in neutral, where it has largely stood for much of the year.

Industry stocks tumble

In a note to CoinDesk, Joe DiPasquale, the CEO of crypto fund manager BitBull, called the SEC suit “unsurprising,” but also wrote that the exclusion of ether from the filing was “a good sign.” He added: “Unless any major developments impact Binance’s functioning, we don’t think the market is likely to lose a lot more.”

While wider equity indexes, including the tech-heavy Nasdaq Composite and S&P 500, largely shrugged off the Binance hubbub, ticking down a few fractions of a percentage point, industry-focused stocks slumped. Coinbase stock fell more than 5% right after the filing was released and was off more than 9% at market close. Shares of MicroStrategy (MSTR), which holds a vast amount of bitcoin on its balance sheet, fell more than 8.5%, Bitcoin miners Riot Blockchain (RIOT), Marathon Digital (MARA) fell more than 8%, while Bitfarms (BITF) dropped more than 7.4%. Safe haven asset gold traded flat just below $1,980.

SEC lawsuit fallout

Lawsuit fallout seemed to seep into all corners of the crypto universe. By Monday afternoon (ET), Binance had suffered more than a half-billion in net outflows, according to a Dune Analytics chart by crypto investment product provider 21Shares. Traders withdrew more than $1 billion of digital assets during this period, compared to the $546 million in deposits, per the chart. According to crypto data platform CoinGecko, the +2% depth for BTC on Binance is $2.7 million, which Charles Storry, head of growth at Phuture, a crypto index platform, told CoinDesk was "very low liquidity levels."

In a Telegram note to CoinDesk, Strahinja Savic, head of data and analytics at Toronto-based crypto platform FRNT Financial, noted Binance had “continued to operate relatively normally since it was charged by the CFTC” earlier this year. “US users have also long been barred from accessing Binance,” he wrote. “It’s hard to pin down an element of this story that really changes the status quo.”

He added: “It’s important to keep in mind that Binance’s regulatory issues do not implicate bitcoin. It’s hard to imagine any traders looking at the SEC’s allegations and thinking that anything there is damaging for the bitcoin bull thesis. However, given the extent of cross collateralization in the space, paired with exaggerated correlations, it’s not surprising to see bitcoin selling off.”

Sologenic’s Ras believes that if the U.S. central bank pauses hiking interest rates this month or later in the summer, “we would likely see a return of seriously positive momentum.”

But he noted pessimistically that with investors in this market “feeling jittery, it will take time to restore confidence. The SEC’s actions are pushing many crypto projects out of the United States, and from this perspective, this is clearly becoming a net negative for the U.S. economy and innovation more generally.”

Biggest Gainers

There are no gainers in CoinDesk 20 today.

Biggest Losers

Asset Ticker Returns DACS Sector
Terra LUNA −16.3% Smart Contract Platform
Gala GALA −10.2% Entertainment
Decentraland MANA −9.0% Entertainment


Lido’s stETH token is now the seventh largest token by market cap, right ahead of Cardano and just behind XRP, according to data from CoinGecko.


stETH has edged out ADA because the market has grown comfortable with staking, and the market has been seeking out a staking solution that’s not going to be affected by U.S. regulatory uncertainty.

So far, the only unstaking parades have been from the shutdown of Kraken’s staking service – and a significant amount of that staked ether went right back into the system via stETH – and Celsius, which moved out of staking contracts on stETH and back into staking contracts with another provider.

All of this should be an endorsement of stETH, as there’s significant institutional trust in the staking mechanism behind it. As CoinDesk previously reported, surging demand for ether staking has led to a month-long wait for nearly 50,000 validators, particularly following the Shapella upgrade, which stimulated a deposit surge and an influx of new market participants, locking over 19 million ETH for staking. At the same time, analysts who have spoken with CoinDesk have continued to downplay fears of any sort of price crash post the Shanghai upgrade – and continue to be proven right – highlighting the balance between new stakers and withdrawals, the inherent withdrawal limits and the mitigating effect of liquid staking derivatives.

So staking is a healthy market, and seems permanent. Lido dominates it by a long shot, controlling 28% of the market with $13.4 billion in total value locked, according to DeFi Llama data. And it's a competitive market too; there are 60 staking protocols with over $1 million in TVL. Lido’s closet competitor has $2.2 billion in TVL.

The only thing that could sink this ship is if a larger percentage of staked ether becomes profitable. Right now it’s just 31%, but we’re only one bank failure and DeFi summer away from that hitting 50%. Will there be a rush for withdrawals then?

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CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Bitcoin (BTC) was down almost 2% over the last 24 hours and back below $27,000, as JPMorgan releases a new report finding retail demand for bitcoin is likely to remain strong ahead of the next halving event. eToro market analyst Josh Gilbert weighed in. Plus, Blockchain Association CEO Kristin Smith joined to discuss the group's amicus brief filed in an ongoing lawsuit by Coin Center against the Treasury Department and its sanctions watchdog. Plus, a look at the inaugural Consensus @ Consensus report.


Binance Withdrawal On Track to be Largest Since March Crypto Banking Crisis: Blockchain data shows that the exchange endured some $503 million in net outflows on Monday amid SEC charges.

SEC Sues Crypto Exchange Binance and CEO Changpeng Zhao, Alleging Multiple Securities Violations: The company already faces a suit from the Commodity Futures Trading Commission.

El Salvador's Volcano Energy Secures $1B in Commitments for 241 MW Bitcoin Mine: Stablecoin issuer Tether is among the investors in the new bitcoin mining site powered by solar and wind energy in El Salvador.

Binance Hands Rising Star Teng Key Role to Replace CEO Zhao at Largest Crypto Exchange: Taking an expanded role overseeing regional markets outside the U.S., former regulator Richard Teng wants to demonstrate Binance is “a new organization.”

Edited by Sam Reynolds and James Rubin.


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James Rubin

James Rubin was CoinDesk's U.S. news editor based on the West Coast.