The cryptocurrency market experienced a significant downturn, with a 3.6% drop in total market capitalization, following the filing of a fresh lawsuit by the United States Securities and Exchange Commission (SEC) against Binance.

The SEC’s allegations focus on Binance’s failure to comply with regulations, including blocking U.S. users from accessing its platform and conducting unregistered crypto offerings and operations. The market reacted swiftly to the news, resulting in losses across major cryptocurrencies.

Impact on Bitcoin, Ethereum, and Altcoins:

Bitcoin (BTC) and Ethereum (ETH) suffered losses of 4.2% and 3.1% respectively, with BTC trading at $25,694 and ETH at $1,815 at the time of writing.

Altcoins, which refer to cryptocurrencies other than Bitcoin, experienced more significant declines ranging from 5% to 15% during the same period.

Top Losers and SEC’s Mentioned Tokens:

PepeCoin (PEPE), a popular meme coin, led the daily market losses with a 14.9% decline since the SEC’s lawsuit was announced. Dogecoin (DOGE), another well-known meme coin, lost 7%.

The list of top ten losers also included tokens like The Sandbox (SAND), Sui (SUI), Conflux (CFX), Decentraland (MANA), Trust Wallet (TWT), Terra Luna Classic (LUNC), Fantom (FTM), Aptos (APT), Immutable (IMX), and Axie Infinity (AXS).

Binance’s Influence and SEC’s Concerns:

Of the mentioned tokens, Trust Wallet is owned by Binance. Additionally, three metaverse tokens listed in the lawsuit (SAND, MANA, and AXS) were classified by the SEC as unregistered securities.

The SEC also identified other cryptocurrencies, including Solana (SOL), Cardano (ADA), Polygon (MATIC), Coti (COTI), Algorand (ALGO), Filecoin (FIL), and Cosmos (ATOM), as unregistered securities. These tokens experienced losses between 6% to 8% within the last 24 hours.

Market Reaction and Investor Sentiment:

The SEC’s lawsuit against Binance has sent shockwaves through the cryptocurrency market, resulting in a significant drop in overall market capitalization.

Investors are concerned about the implications of the regulatory action and the potential consequences for Binance and other tokens mentioned in the lawsuit. The market volatility underscores the importance of regulatory compliance and investor protection in the cryptocurrency industry.