Cryptocurrency traders recently faced a staggering $320 million in losses due to liquidations over the course of 24 hours, as revealed by data from CoinGlass. This sudden financial impact was triggered by a plummet in crypto prices on Monday, following a lawsuit by the Securities and Exchange Commission (SEC) against the well-established exchange, Binance, for alleged violations of securities laws.
The majority of these liquidations targeted long positions, wherein traders were counting on the prices to rise. Approximately $289 million of these long positions were wiped out during the day, which signified the largest level of long liquidations within at least three months. This suggests that the abrupt drop in prices caught most investors off-guard.
The SEC lawsuit has accused Binance, the world’s largest crypto exchange in terms of trading volume, and its CEO, Changpeng “CZ” Zhao, of offering unregistered securities, mixing user deposits, and inflating trading volumes. As a result, the tokens mentioned in the lawsuit, such as Binance’s BNB, solana (SOL), cardano (ADA) among others, led the price decline, dropping up to 10% during the day. Furthermore, Bitcoin (BTC), the largest cryptocurrency by market capitalization, slipped below $26,000 for the first time since mid-March.
In total, nearly 119,000 crypto traders were liquidated in just a 24-hour period. BTC traders experienced the majority of the losses, totaling nearly $119 million. Ether (ETH) investors also suffered, with $41 million in losses as the token’s price dipped below $1,800. Additionally, around $6.5 million worth of BNB trading positions vanished as the token’s value fell sharply.
Of the various exchanges, Binance traders experienced the largest sum in losses, totaling $105 million. This was followed by $88 million in losses on OKX and $43 million on ByBit, according to CoinGlass data.
While the SEC lawsuit adds a layer of skepticism to the cryptocurrency landscape, it also serves as a reminder that the industry is still vulnerable to legal challenges and market fluctuations. Although there’s no denying the potential for blockchain technology, investors are urged to stay vigilant and be prepared for unforeseen risks. In conclusion, this incident highlights the delicate balance between the pros and cons of the ever-evolving crypto market.
Source: Coindesk
