Shares of Coinbase fell 10.3% after news that the United States Securities and Exchange Commission (SEC) was suing Binance for alleged violations of federal securities laws on the evening of June 5.
Shares of Coinbase fell more than 5% shortly after the news broke and were down 10% at press time.
Meanwhile, the bitcoin (BTC) price has dropped more than 5% to below $26000. Shares of MicroStrategy (MSTR), which holds a large amount of Bitcoin on its balance sheet, fell nearly 9%.
The SEC is accusing Binance of offering unregistered crypto securities including BNB and BUSD to the market and mixing customer funds among other allegations.
In March, Coinbase itself received a warning from the SEC that it may soon receive enforcement action regarding the listing of tokens deemed by the SEC to be unregistered securities.