How US regulators sue Binance has affected crypto prices
Bitcoin held above the $27,000 mark on Tuesday after the US Commodity Future Trading Commission’s (CFTC) crackdown on cryptocurrency exchange Binance shook crypto markets on Monday.
Bitcoin (BTC-USD) was down 2.8% at $27,084.
Ethereum (ETH-USD) fell 1.4% to $1,732.
The CFTC has accused Binance of failing to properly register with regulators and providing unregistered crypto derivatives in the United States.
“The Commodity Futures Trading Commission announced today that it has filed a civil enforcement action charging Changpeng Zhao and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act and CFTC regulations,” the CFTC said.
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Binance’s BNB token (BNB-USD) fell 4.9% to $310.
Binance CEO Changpeng ‘CZ’ Zhao said: “Today, the CFTC filed an unexpected and disappointing civil complaint, despite our cooperation with the CFTC for over two years.
“On initial review, the complaint appears to contain an incomplete recitation of the facts, and we disagree with the characterization of many of the issues alleged in the complaint.”
In February, Binance announced its readiness to pay monetary penalties to make up for past violations.
The survey added to already cautious investor sentiment permeating crypto markets, as traders await the outcome of the US Securities and Exchange Commission (SEC) notice to Coinbase (COIN), stopping bullish moves in their tracks.
Bitcoin had pumped over 30% after the collapse of Silicon Valley Bank (SVB) exposed systemic risk strain in the traditional financial structure.
However, green shoots sprouting across most cryptocurrency charts have been cut, with all tokens falling into the red except ripple (XRP-USD), which saw a 3% increase on Tuesday, up to $0.48.
Despite the current market turmoil, MicroStrategy founder Michael Saylor announced the purchase of 6,455 bitcoins at an average of $23,238 per bitcoin.
Mark Lurie, co-founder of Shipyard Software, said: “The CFTC has fired the US government’s long-awaited opening salvo against Binance, and it’s a doozy.
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“However, interpreting this as an attack on crypto would be a mistake.
“The allegations are not about matters that exist ‘in a gray area of regulation’, but rather about evasion of cut-and-dried, well-understood regulations and rules that exist for pretty good reasons.”
Yamina Sara Chekroun, head of legal US at Ramp, told Yahoo Finance UK: “This is a signal to the industry that jurisdictional controls are going to be closely monitored and enforced, and that global players can be held to account in US courts.
“We believe that strong periodic reviews of internal compliance policies and implementation of the processes for these guidelines will help all digital asset companies comply with the new guidance, if any, this case may bring.”
See: The Reasons UK Banks Are Blocking Crypto Exchanges | Crypto Mile
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