Binance exchange

Bitcoin slides on SEC crypto exchange crackdown fears and Binance hack rumour

Bitcoin has dropped below $10,000 to $9,500 after a warning from the Securities and Exchange Commission (SEC) about using unregulated exchanges and rumours of popular crypto exchange Binance being hacked.

The strongly worded SEC communication is headed “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets”.

“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not,” the SEC statement reads.

“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”

The latest move by the SEC, following on from the news of the “scores of subpoenas it has issued to initial coin offerings that emerged last week, indicates the US financial authorities may have a number of exchanges in their sights.

Those exchanges operating in the US that don’t comply with securities law will likely be forced to close.

Governor of the Bank of England Mark Carney in a speech last week said exchanges needed to be brought into line to operate under the same regulations that applied to others that “traded securities”.

Binance hack rumours denied

The statement from the SEC was followed by reports emerging of a hack of the Binance exchange.

Although some customers have reported seeing their holdings of altcoins sold into bitcoin without their permission, it does not appear to be widespread.

Binance has issued a statement on its Reddit account denying that the exchange has been hacked but speaks of “victims”, suggesting there has been a security incident at some level.

“We are investigating reports of some users having issues with their funds. Our team is aware and investigating the issue as we speak.

As of this moment, the only confirmed victims have registered API keys (to use with trading bots or otherwise). There is no evidence of the Binance platform being compromised.

Please remain patient and we will provide an update as quickly as possible.

Edit: Withdrawals are temporarily disabled at this time.”

The fact that those with registered API keys are affected means whatever it is that has happened at the exchange has probably originated in third-party automated trading tools.

No reports of actual losses have come to light as yet but all withdrawals remain suspended.

Bitcoin slides on SEC crypto exchange crackdown fears and Binance hack rumour 12