Will Binance Litigation Bring The Big Crypto Crash? – Cryptokoin.com

The case of the Commodity Futures Trading Commission (CFTC) crypto exchange Binance has changed the narrative in the market. CFTC chairman Rostin Behnam has made it clear that they will be tough on their lawsuit against Binance for violating US regulations.

Is the Binance CFTC lawsuit enough to affect the crypto downtrend?

The Commodity Futures Trading Commission (CFTC) lawsuit against crypto exchange Binance changed the narrative in the market. But we’ll see if the move still has enough legs to impact a major downtrend in cryptocurrency prices. Although the news of the lawsuit led to a significant drop in Bitcoin price, it continues to hold the resistance above the $26,600 level. Meanwhile, the crypto community is debating about the impact of CFTC action, which is in stark contrast to how the US Securities and Exchange Commission (SEC) views major cryptocurrencies.

cryptocoin.comThe Binance lawsuit comes less than a week after the SEC issued a Wells Notice to Coinbase. The notice was about concerns about listed digital assets, staking services and other things.

Binance CFTC case FUD over?

Despite the FUD regarding the Binance lawsuit, bitcoin price managed to stay above the strong support level of $26,600. Crypto analyst Crypto Tony warned of this critical level after Binance news broke. Meanwhile, another analyst, Alex Kruger, said that the CFTC’s enforcement actions have traditionally not had a huge impact on the crypto market. “CFTC actions have historically had no effect,” Kruger said. Binance news brought welcome short-term volatility. But it is unlikely to start a trend,” he comments.

CFTC Chairman declares war on Binance

Rostin Behnam, head of the Commodity Futures Trading Commission (CFTC), said on Tuesday that Binance’s continued efforts to circumvent US regulations and allow US citizens to use the platform using VPN are part of an ‘ongoing scam’. The CFTC has filed a lawsuit against cryptocurrency exchange Binance and its CEO, Changpeng Zhao, alleging that they knowingly marketed unregistered crypto derivatives in the country.

In an interview broadcast on CNBC, the CFTC chairman stated that the Binance exchange deliberately circumvented the CFTC’s registration requirements by instructing customers on how to connect to the exchange without disclosing their location in the United States. He also noted that as Binance has never registered with the commodity watchdog, it is not legally authorized to offer trading of cryptocurrency futures in the US.


In addition, Behnam stressed that Binance’s lack of a registered headquarters does not allow it to evade US regulations. Indeed, the regulator is now more willing to follow the exchange with tighter scrutiny. Talking about the investigation, the CFTC chief said:

This was an ongoing scam from 2019 and an ongoing violation of the Commodity Exchange Act. This seemed like a pretty clear avoidance situation and something we needed to step up aggressively and do it as quickly as possible. We’re pretty confident in this situation, it’s something we clearly care about a lot and we’ve been at the top of this crypto space for several years now.

Binance’s ongoing legal hurdles

Court records presented on Monday included Binance’s internal discussions, including one of Samuel Lim, who continues to serve as the exchange’s senior compliance officer until January 2022. Lim allegedly suggested this by stating, “On the surface, we can’t seem to have US users, but in reality we have to get them in other creative ways.”

Binance and its founder, Changpeng Zhao, denied the accusations made by the CFTC and showed their intent to oppose the supervisory agency’s lawsuit, which was filed in a federal court in Chicago. At press time, Binance’s native cryptocurrency, BNB, was changing hands at $313.5, up 1.93% in the last 24 hours.

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