Binance US, the American platform of the Binance crypto platform, has been taking a hit since last week. Targeted in the unprecedented campaign of the Securities and Exchange Commission (SEC), its very survival is at stake according to the company. What could happen?
Binance US claims to be in danger and may have to shut down
A week ago now, the SEC has requested the freezing of Binance US assets, following its complaint affecting the Binance Group, as well as its CEO Changpeng Zhao. Following this decision, the platform suspended dollar deposits as well as fiat currency withdrawals. Although the platform has claimed that its clients’ funds are guaranteed, this has led to an exodus of users – as well as their cryptocurrencies.
And the consequences are very real. According to the lawyers of the exchange platform, Binance US is facing a major crisis, and might have to lock up. In a document filed yesterday, they explained that the SEC actions could “primarily harm customers of [Binance US]effectively leading to its bankruptcy, and preventing it from defending itself in this litigation“.
The company offers a solution to the judge: the transfer of funds to the parent company of Binance US, so that we can continue to pay employees and vendors. It would also assure the judge that the assets will not be accessed by Changpeng Zhao, who is also the subject of the complaint. The judge is expected to make a decision today, so we should know more in the next few hours.
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Consequences already palpable for Binance US
The consequences of the SEC campaign are already weighing on Binance US. As the analysis firm Kaiko points out, Binance’s market share in the United States has plunged for two months:
In just 2 months, https://t.co/pup2WYms9R’s market share has fallen from more than 20% to just 4.8% relative to its closest US competitors 👀 pic.twitter.com/Rm2DxJ9fAL
— Kaiko (@KaikoData) June 12, 2023
Separately, Binance US’s market depth has dropped nearly 80% since the SEC filed its lawsuit. Massive withdrawals have taken place on the platform: in four days, 75 million dollars flew awayaccording to data shared by Nansen.
So is this the beginning of the end for Binance US? The answer largely lies in this potential asset freeze. In its latest statement, the platform claims to be open to discussion, but it strongly condemns the actions of the SEC:
“Although we remain open to a productive compromise […]Binance US will continue to vigorously defend itself and its customers and the industry against baseless SEC attacks. »
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Source: legal documents
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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