Bitcoin claws back $28,000 despite regulatory issues from Binance lawsuit
Bitcoin rose above $28,000 on March 29, recovering from regulatory pressure caused by the Commodities Futures Trading Commission (CFTC) filing against Binance.
The CFTC claims Binance has violated the Commodities Act
On March 27, the CFTC sued Binance, CEO Changpeng Zhao (CZ) and Compliance Lead Samuel Lim – alleging that the defendants had violated commodity regulations.
The complaint — filed in the District Court of Illinois — listed several violations, including:
- Illegal solicitation of US users.
- Does not register the exchange platform.
- Has no headquarters.
- Failure to prevent and detect money laundering and terrorist financing.
Entrepreneur @ImNotTheWolf drew attention to in-house trading desk mentioned in the filing, saying that the long and short of it is that Binance used the information it had about traders to trade against them.
In the immediate aftermath of the announcement, the platform experienced a spike in withdrawals – with users withdrawing over $2 billion in funds, according to the Wall Street Journal.
Talking to CNBC, CFTC Chair Rostin Behnam said the defendants had clear intentions to evade US laws, while also having a direct method of gaining access to the US market in place.
CZ responded that he was disappointed and surprised by the complaint as Binance had been cooperating with the agency for the past two years. He added that “we do not agree” with the allegations, mentioning “incomplete recitation of facts.”
Bitcoin recovers
On news of the CFTC filing, Bitcoin lost 5%, sinking as low as $26,500 – marking a 10-day low.
The leading cryptocurrency then ranged between $26,640 and $27,300 before a break in the range occurred on Tuesday evening (BST).
Around 3:00 AM ET today, BTC cracked $28,000 – with the previous 15-minute candles showing BTC turning resistance into support. This level was the approximate price before the Binance lawsuit.
After confirming support, a move higher occurred, reaching a peak of $28,660. 24-hour gains totaled 5.3% at press time.
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