SEC’s lawsuit against Binance adds to the woes of ailing crypto sector

SEC’s lawsuit against Binance adds to the woes of ailing crypto sector

The US Securities and Exchange Commission’s lawsuit against crypto exchange Binance and its head Changpeng Zhao injects fresh uncertainty into a sector that’s struggling to maintain mainstream relevance.

The SEC accused Binance Holdings Ltd. and Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules. The action adds to the regulatory heat on the largest digital-asset trading platform. It’s also another black eye for crypto after a rout in 2022 that contributed to rival FTX’s down-fall amid a flurry of fraud allegations.

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The market faces an uphill task to restore trust and, meanwhile, investors are moving on to themes like artificial-intelligence stocks.

The overall value of digital coins has plunged to $1.1 trillion from a peak of over $3 trillion in 2021, when giant stimulus fueled a pandemic-era boom in tokens such as Bitcoin.

Jane Street Group, Jump Trading, and other major trading firms have pulled back from crypto in the US amid heightened regulato-ry scrutiny. The ensuing decrease in liquidity can pose an obsta-cle for investors by making it harder to get into and out of digital-asset investments in an orderly way.

‘Very different’

“The industry will be very