Crypto shares tumble after U.S. SEC charges Binance with securities law violations

June 5 (Reuters) – Cryptocurrencies and shares in crypto and blockchain-related companies tumbled on Monday after the U.S. Securities and Exchange Commission sued crypto exchange Binance and its founder, Changpeng Zhao, alleging violations of securities laws.

The SEC’s complaint against the world’s biggest cryptocurrency exchange listed 13 charges.

Bitcoin , the world’s biggest cryptocurrency was down 5.3% after falling to its lowest level since mid-March following the news. Binance’s cryptocurrency fell 9.4%.

The SEC said Binance and Zhao artificially inflated trading volumes and diverted customer funds, and also failed to restrict U.S. customers from its platform and misled investors about market surveillance controls. The SEC said they also secretly controlled customers’ assets, allowing them to commingle and divert investor funds “as they please.”

In a blog post, Binance said: “We intend to defend our platform vigorously,” adding that “because Binance is not a U.S. exchange, the SEC’s actions are limited in reach.”

Shares of rival crypto exchange Coinbase Global (COIN.O) were down 11.6%, while Blockchain farm operator Bitfarms Ltd stock was down 5.8%.

Crypto miner Riot Platforms Inc (RIOT.O) was off 8.2% while Marathon Digital (MARA.O) was down 8.7%, and Hut 8 Mining was off 3.9%. Bit Digital (BTBT.O) fell 8.1%.

Shares of software firm and BTC buyer MicroStrategy (MSTR.O) declined 8.4%.

BTC mining machine makers Ebang International and Canaan Inc (CAN.O) were down 2.3% and 6.1%, respectively.

In March, Binance and Zhao were sued by the U.S. Commodity Futures Trading Commission for operating what the regulator said was an “illegal” exchange and a “sham” compliance program.

Reporting By Sinéad Carew in New York and Manya Saini in Bengaluru; Editing by Leslie Adler

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