Binance CEO Comments on CFTC Case: Is There a Risk of Collapse?

The U.S. Commodities and Futures Trading Commission (CFTC) reported on Monday, March 27, that the crypto exchange allegedly violated derivatives regulations. Binance and its CEO Changpeng Zhao.

Binance CEO said the developments in question “FUD, fake news, attacks, etc. ignore things!” He replied with a comment and denied the accusations. As we have reported as Koinfinans.com, this development is not a first for the stock market. Some names from the industry describe the events as “normal”, as if conceding the CEO.

In the blog post published by Binance, the determination that it is ready for the legal fight draws attention. As a matter of fact, fighting the lawsuit from the CFTC may be much more difficult than it seems. The CFTC claims that Binance has failed to register itself as a US derivatives exchange. He also added that the crypto exchange has structured its business operations to avoid registration requirements.

The CFTC also supports Binance and Changpeng ZhaoHe also expanded the scope of the lawsuit, underlining that . The institution also filed the claim that Binance directed “VIP customers” to open accounts on behalf of front companies.

While Binance has denied all allegations in its blog post, industry players believe the CFTC’s accusations are quite serious in nature. Tim Massad, former chairman of the CFTC and currently director of the Digital Assets Policy Project at Harvard Kennedy School, told Bloomberg.

It’s a series of moves made of very strong claims. They are seeking a permanent injunction against the defendants, thus preventing CZ, as well as Binance, from doing business in the US, basically registering or trading commodities in the US.

Can Binance Exchange Crash Like FTX?

Since the collapse of FTX in November 2022, Binance’s dominance in the crypto space has continued to increase. Exchange, cryptocurrency It accounts for 70% of all trading volumes in the spot market. Similarly, in terms of perpetual futures, it controls a total of 62% of global volumes in 2022.

All these data are clear proof that even the leading exchange Coinbase is way ahead of it. Recent developments have triggered a decline in the crypto money market, especially Bitcoin.

Binance’s ties with its traditional banking partners were also frayed by the recent collapse of Signature Bank. If the Binance case takes longer, as in the case of Ripple, it could have greater ramifications for the crypto space compared to recent events.

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