Modified date: November 22, 2023 at 15:14 GMT

Why is the crypto market down today?

The crypto market saw a significant correction over the past few days with many top coins entering the red, following the industry’s most recent rally.

July 7, 2023 at 11:07 GMT

The crypto market saw a significant correction over the past few days with many top coins entering the red following the industry’s most recent rally.

Markets were hit hard by the news of the $4 billion Binance settlement with the U.S. Department of Justice (DoJ), which resulted in CEO and co-founder Changpeng “CZ” Zhao resigning from his position. 

It is proving to be a tough week for cryptocurrency exchanges as the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Kraken for allegedly operating as an unregistered securities exchange.

Binance settlement with DOJ

It was announced on 21 November that Binance was settling a multi-year investigation from the DoJ. As a result, the exchange paid a $4bn penalty and CZ stepped down from his CEO position, pleading guilty to failing to prevent money laundering. 

The largest cryptocurrency exchange also pleaded guilty to criminal charges of breaching international financial sanctions.   

The US Treasury department claimed the exchange failed to report “well over 100,000 suspicious transactions”. These had links to ransomware attacks, large-scale hacks, and terrorist groups.

Merrick Garland, US attorney-general, said: “In part because of the crimes committed, Binance became the largest cryptocurrency exchange in the world. Now, Binance has paid one of the largest corporate penalties in US history.”

SEC files lawsuit against Kraken

Kraken, another significant cryptocurrency exchange, was sued earlier this week by the SEC. It was accused of operating as an unregistered securities exchange.

The lawsuit was filed in a San Francisco federal court and is the latest step in the commission’s push for digital assets to be considered securities. 

Since 2018, Kraken has made millions of dollars through crypto purchases that turn a “blind eye” to securities law, according to the SEC.

Kraken has denied these allegations and said Congress should first settle on crypto exchange regulation. It said the SEC’s lawsuit was “incorrect as a matter of law, false as a matter of fact, and disastrous as a matter of policy.”

DoJ seizes $9m USDT from scammers

The DoJ also recently seized almost $9 million worth of Tether ($USDT) connected to crypto scams, according to an official press release. The crypto addresses were traced to a human-trafficking syndicate. 

This organisation was claimed to have defrauded more than 70 victims “through romance scams and cryptocurrency confidence scams”.

It was agents and analysts from the US Secret Service that were able to trace the funds that that were laundered. 

Nicole Argentieri, Acting Assistant Attorney General, said: “These scammers prey on ordinary investors by creating websites that tell victims their investments are working to make them money. The truth is that these international criminal actors are simply stealing cryptocurrency and leaving victims with nothing.” 


What’s going on with crypto today?

The global cryptocurrency market capitalisation has fallen back to $1.39 trillion level today. The market suffered a negative shift by 0.63% in the last 24 hours. Flagship cryptocurrency Bitcoin was trading at $36,345 at the time of press, according to CoinMarketCap.

Which coins are down today?

The top loser within the top 100 cryptocurrencies by market cap was BNB ($BNB), which fell by over 9% in the last 24 hours after the settlement with the DoJ was announced. It was followed by Gala ($GALA) with a 7% daily decrease in price.

Will crypto market recover?

The long-term outlook continues to look precarious for markets across the globe. The conviction of Sam Bankman-Fried is going to release a lot of questions. Meanwhile, the market is currently feeling the impact from the recent Binance settlement. Watch this space…