Bitcoin, crypto prices dip as Binance faces CFTC lawsuit - News Time

Bitcoin, crypto prices dip as Binance faces CFTC lawsuit

By Ambar Warrick

Investing.com–The prices of Bitcoin and other major cryptocurrencies fell on Monday after Binance was slapped with a lawsuit byU.S. regulators accusing the world’s largest crypto exchange of flouting compliance laws and offering illegal derivatives products. 

The U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, founder Changpeng Zhao and former Chief Compliance Officer Samuel Lim, alleging “willful evasion” of U.S. laws. 

The complaint states that Binance instructed employees and customers to bypass compliance controls, and also likely engaged in insider trading by operating some 300 “house accounts” that were tied to Zhao.

The CFTC also accused Binance of operating an illegal derivatives exchange for tokens like Bitcoin and Ethereum, which the regulator referred to as commodities. 

Bitcoin

fell 3% after the announcement to $27,143.95, while

Ethereum

lost 3.3%.

Binance Coin (BNB)

, the exchange’s native token, lost 5.5%, while overall crypto market capitalization fell nearly 3%.

The CFTC complaint cited several internal emails and memos revealed by a series of Reuters investigations. The commission is seeking monetary penalties, as well as a permanent ban on Binance’s activities.

Monday’s lawsuit is the latest step in an ongoing regulatory crusade against crypto, which saw U.S. authorities charge several high-profile firms with engaging in scams or violating securities laws.

Recent media reports suggested that the U.S. Department of Justice has been investigating Binance for facilitating money laundering and terrorist financing activity since at least 2018. 

Most recently, Coinbase (NASDAQ:

COIN

), the country’s largest crypto exchange, was notified of pending regulatory action by the Securities and Exchange Commission (SEC), while Tron founder Justin Sun was also charged with market manipulation and violating securities law. 

The regulatory action, coupled with the shutdown of several crypto-friendly banks in March, has further soured investor sentiment towards the space.

This also comes after rising interest rates and a series of high-profile bankruptcies wiped out about 70% of crypto market capitalization through 2022.

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