Shares of Coinbase (COIN) dropped 10.3% on Monday after news broke that the Securities and Exchange Commission (SEC) was suing Binance for allegedly violating federal securities law. The filing sent the stock tumbling more than 5%, and the price of bitcoin (BTC) fell below $26,000. MicroStrategy (MSTR), which holds a large amount of bitcoin, also saw its shares drop nearly 9%.
The SEC is accusing Binance of offering unregistered securities and staking services to the public, among other allegations, as U.S. lawmakers increase enforcement actions against crypto companies. In March, Coinbase itself received a warning from the SEC that it may soon face enforcement action related to its listing of potential unregistered securities. In response, Coinbase has increased its presence in Canada, which it claims has more clear regulations for crypto firms than the U.S., making it easier to operate.
The SEC is accusing Binance of offering unregistered securities and staking services to the general public, said the SEC.