The US Securities and Exchange Commission (SEC) has taken legal action against Binance and its CEO, Changpeng Zhao (CZ), alleging violations of securities laws. This development has had a negative impact on the price of bitcoin (BTC), which experienced a drop of more than 3% due to increased bearish sentiment in the market.

BTC has been in a downward trend since early May and has fallen below the critical $26,000 level. At the time of writing, BTC is trading around $25,780, representing a 3.8% decline in the past 24 hours from the $27,000 mark. However, despite the price decline, the 24-hour trading volume for bitcoin has increased by 75% and currently stands at over $20 billion.

Interestingly, data from Glassnode indicates that Bitcoin's median transaction volume has actually increased, reaching a one-month high of $75.17. As news of the SEC lawsuit broke, Binance experienced a significant net outflow of funds, with over $69 million leaving the exchange in under an hour.

In response to the SEC's actions, many members of the crypto community on Twitter have expressed their support for Binance. In a poll conducted by CZ, asking which entity provides better protection, over 85% of nearly 100,000 respondents voted in favor of Binance over the SEC. Some users have even created memes mocking the SEC, highlighting its perceived inaction regarding previous financial failures such as FTX, Celsius, and Terra.

This situation raises questions about the SEC's effectiveness in safeguarding investors' interests over the years.