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Bitcoin takes a bath as SEC sues exchange giant Binance

Changpeng Zhao, Co-Founder & CEO, Binance
The SEC is suing the co-founder and CEO of Binance, Changpeng Zhao, for allegedly operating a 'web of deception.' Photo: Ben McShane/Sportsfile/Getty

Bitcoin’s price (BTC-USD) fell to its lowest point in weeks on Tuesday as the US Securities and Exchange Commission announced it is suing crypto exchange Binance.

The digital asset fell 10% last night, to lows of $25,625 (£20,625), before recovering to around $25,750 by 9am BST.

Associated crypto stocks also fell last night following the news, with US-listed Coinbase (COIN) closing 9% lower.

Binance is one of the dominant market forces in the crypto exchange landscape with a large portion of the market’s trading volume. The lawsuit alleges illegal operations in the US and the mishandling of customer funds. Crypto has been acutely in regulators’ crosshairs since the failure and bankruptcy of rival exchange FTX.

Read more: Check the latest crypto prices live 

The crux of the 136-page suit alleges that Binance orchestrated “an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”

It also takes a broader sweep at the crypto ecosystem by alleging BNB (Binance’s exchange token), and others such as SOL, MATIC and ADA are securities.

Binance has said it will defend itself vigorously against claims of wrongdoing. It said it has engaged with the regulator and sought to cooperate.

“Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry,” it said in a statement.

Despite sounding like a big dip, the price of bitcoin has seen much worse days this year. It started off the year at around $16,600 – cratering in the fallout of FTX’s bankruptcy.

On Tuesday morning ether (ETH-USD) was also down about 3%, hovering at just above $1,800.

Binance and its US affiliate exchanege were hit by outflows of close to $790 million over the last 24 hours, according to CNN.

Watch: Sovereign Agents: Your own personal AI assistant - The Crypto Mile

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