A deteriorating macroeconomic environment and the collapse of industry giants such as FTX and Terra have weighed on bitcoin prices this year.
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Cryptocurrency prices fell on Monday after the U.S. Securities and Exchange Commission accused Binance, the world’s largest cryptocurrency exchange, of violating securities laws.
bitcoin down about 6% to $25,542.10, That was the lowest level since March, according to Coin Metrics. ether It fell more than 5 percent to $1,808.16.
Binance Coina token used to pay transaction and exchange fees on the Binance exchange, fell 9%.
Shares fell after the U.S. Securities and Exchange Commission accused Binance and its co-founder Changpeng Zhao of mixing billions of dollars of investor funds with its own and violating securities laws. Earlier this year, the Commodity Futures Trading Commission filed a similar complaint against Binance.
“Binance is the largest cryptocurrency exchange by trading volume, so it’s not surprising that the market reacted to the news,” Sam Callahan, chief analyst at bitcoin service Swan Bitcoin, told CNBC. Regulatory actions by participants create uncertainty and lead to increased market volatility in the short term.
“However, such volatility is usually temporary and once the market digests the news, prices may recover,” he added. “In the long run, this can be seen as a healthy development of the ecosystem, as bad actors are purged and capital flows out of cryptocurrencies with significant regulatory risks and into Bitcoin.”
The lawsuit is the latest in a crackdown on the cryptocurrency industry by U.S. regulators this year. Since January, the SEC has accused Kraken, Genesis and Gemini Trust of offering unregistered securities to investors, and warned Coinbase that it could be subject to securities charges.
Bitcoin had its worst trading month since November last week, ending May down 7.9 percent after trading in a tight range between $26,000 and $28,000. Technical analysts see $25,200 as a key level to watch Bitcoin go down.