The cryptocurrency market has become increasingly precarious. The Securities and Exchange Commission’s (SEC) recent legal actions against crypto exchanges such as Binance, Binance.US, and Coinbase have thrown crypto liquidity into crisis.
These regulatory actions are fostering an environment characterized by instability and heightened risks for traders.
Market Depth of Top 10 Cryptos Plummets
A critical aspect of the SEC’s allegations involves crypto exchanges offering trading of unregistered securities. These include Solana (SOL), Cardano (ADA), and Filecoin (FIL), to name a few.
The charges, first leveled at Bittrex, have extended to include Binance and Coinbase. The lawsuits cite significant growth in the trading volumes of altcoins over traditional favorites like Bitcoin and Ethereum.
“The growth in quarterly volumes [for Binance.US] was astonishing, jumping from $5 billion, to $42 billion, to $106 billion in just three quarters. Notably, altcoin volume was greater than BTC and ETH volume combined for the entirety of the bull run, which is highly unusual for US exchanges,” reads Kaiko Quarterly Report.
The fallout from these charges has led to a drastic reduction in liquidity across all crypto trading platforms.
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Author: Bary Rahma
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