Crypto investors don't care of Binance's CFTC lawsuit

48
2
Crypto investors don't care of Binance's CFTC lawsuit

A U.S. government official took aim Monday on the biggest target in crypto. Investors don't seem to care.

The value of crypto locked in Binance's blockchain, BNB, has dropped 2.7%, while BNB, the token that powers that blockchain, has fallen 4.3% since news broke on Monday that Binance's founder and a former executive had sued the company. The drop in crypto markets just barely outpaced a greater drop in crypto markets.

The lack of market reaction shows traders are betting that CFTC action won't disrupt Binance's operations. The lawsuit against crypto's largest exchange is the latest in a series of regulatory actions that have prompted speculation that U.S. regulators are considering a coordinated effort against the cryptocurrency industry.

The outflows from Binance's centralized exchange have also been muted. Users withdrew about $1.2B from the exchange on Monday. Although substantial, that figure has been topped on two separate occasions this month alone, and is less than 2% of the stock market's holdings, per Defi Llama.

Binance has made little effort to screen customers during their account sign-up process, allowing criminals and Americans to trade on its platform, according to the CFTC lawsuit.

The statement did not state whether Zhao had been charged with terrorism or other offenses. The analysts are confident Binance will survive CFTC's lawsuit.

Some lawyers flagged claims within the complaint that could become fodder for a criminal investigation led by the Department of Justice. Details in the suit suggest Binance had been used by criminals and entities subject to U.S. sanctions.

The Commodity Futures Trading Commission is suing Zhao, three of the numerous companies that run the Binance platform, and a former Binance executive. The CFTC is seeking to permanently ban Binance from trading commodities in the United States, and claw back money Binance has made from customers based in the United States.

own emails and chats reflect that Binance's compliance efforts have been a sham and Binance deliberately chose - over and over - to place profits over following the law, Lowe said in a prepared statement.

Shapiro, a leading crypto lawyer, described the proposed penalties as aggressive and potentially destructive, but acknowledged there was no guarantee a court would grant those penalties if Binance were found guilty.