According to a lawsuit filed by the US SEC, Binance and its founder have mishandled funds and violated US securities laws.

The world's largest cryptocurrency exchange Binance and its founder Changpeng Zhao have been accused of misusing investor funds, operating as an unregistered exchange, and violating a slew of US securities laws in a lawsuit filed by US regulators.

Filed in a federal court in Washington DC, the US Securities and Exchange Commission (SEC) lawsuit on Monday lists 13 charges against the firm - including commingling and divert customer assets to an entity Zhao owned called Sigma Chain.

The news caused Bitcoin, the largest crypto in terms of value in circulation - worth over $500 billion (€468 billion) - to plummet, losing almost 2 per cent in a matter of minutes.