Coinbase (COIN) shares fell 10.3% after it was revealed Monday that the Securities and Exchange Commission (SEC) has sued Binance for violating federal securities laws.
The stock fell more than 5% immediately after the filing was published, and then continued to fall. Meanwhile, Bitcoin (BTC) price fell more than 5% to below $26,000. Shares of MicroStrategy (MSTR), which holds large amounts of Bitcoin on its balance sheet, fell nearly 9%.
Among other things, the SEC accuses Binance of offering unregistered securities and staking services to the general public as US lawmakers tighten their enforcement efforts against crypto companies.
In March, Coinbase itself received a warning from the SEC that enforcement action may soon be taken in relation to the listing of potentially unregistered securities. Since then, the exchange has doubled its presence in Canada, which it says has clearer rules for crypto firms than the US, making it easier to operate in the country.
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