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Crypto Traders Suffer $320M Losses in Liquidations as SEC Lawsuit Against Binance Spurs Market Plunge
Cryptocurrency prices nosedived Monday as the U.S. Securities and Exchange Commission (SEC) sued the crypto exchange and its chief executive for multiple federal securities law violations.
Updated Jun 6, 2023, 1:39 p.m. Published Jun 5, 2023, 10:29 p.m.
Cryptocurrency traders suffered some $320 million of losses in liquidations over the past 24 hours, data by CoinGlass showed, as crypto prices plummeted Monday after the Securities and Exchange Commission (SEC) sued exchange giant Binance for allegedly violating securities laws.
Some $289 million of long positions – traders who bet on prices to rise – were wiped out during the day, marking the largest level of long liquidations in at least three months, per CoinGlass.
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Crypto markets nosedived Monday following the SEC suit accusing Binance, the world’s largest crypto exchange by trading volume, and its chief executive, Changpeng “CZ” Zhao, of offering unregistered securities, commingling user deposits and inflating trading volumes.
Read more: SEC Sues Crypto Exchange Binance and CEO Changpeng Zhao, Alleging Multiple Securities Violations
Tokens cited in the lawsuit as unregistered securities – Binance’s BNB, Solana's SOL, Cardano's ADA among others – led the decline, dropping as much as 10% over the day. Bitcoin (BTC), the largest cryptocurrency by market capitalization, fell below $26,000 for the first time since mid-March, according to the CoinDesk Bitcoin Price Index (XBX).
The large amount of liquidations suggest that the sudden drop in prices caught most investors off-guard. Altogether, nearly 119,000 crypto traders were liquidated in 24 hours, per CoinGlass.
BTC traders booked most of the losses, almost $119 million. Ether (ETH) investors suffered $41 million of losses as the token’s price dipped below $1,800. Some $6.5 million of BNB trading positions were wiped out as the token fell sharply.
Binance traders suffered $105 million of losses, the most on any of the exchanges, followed by $88 million of losses on OKX and $43 million on ByBit, according to CoinGlass.
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