Extreme Panic in Crypto Markets After the CFTC-Binance Clash
- Binance and its CEO Changpeng Zhao have been accused of regulatory violations by the CFTC in the U.S.
- Over $1.5 billion worth of cryptocurrency has been withdrawn from various centralized exchanges, with $850 million being withdrawn from Binance alone
- The lawsuit highlights the importance of adhering to regulatory obligations to ensure a fair and transparent market
Binance Faces CFTC Lawsuit as $1.5B Withdrawn from Platform
Binance was accused of regulatory violations by the CFTC, leading to significant cryptocurrency withdrawals.
Binance, one of the world's largest cryptocurrency exchange platforms, and its CEO Changpeng Zhao have been accused of regulatory violations by the United States Commodity Futures Trading Commission (CFTC).
The accusation has led to a significant amount of cryptocurrency leaving the platform's wallets, with over $1.5 billion being withdrawn from various centralized exchanges in the twelve hours leading up to the indictment. More than half of this amount, or $850 million, was withdrawn from Binance alone.
The CFTC has filed a lawsuit against Binance and its CEO in the U.S. District Court for the Northern District of Illinois, alleging that the company failed to meet its regulatory obligations by not properly registering with the derivatives regulator. Binance is accused of conducting transactions in Bitcoin, Ether, and Litecoin for U.S. citizens since at least 2019.
It is not the first time that Binance has drawn criticism. The Internal Revenue Service (IRS) and federal prosecutors have been investigating the exchange's adherence to Anti-Money Laundering rules, and the Securities and Exchange Commission (SEC) is conducting its own inquiry into whether Binance allowed U.S. traders to access unregistered securities.
Despite the allegations, Changpeng Zhao has denied any wrongdoing, stating that Binance "does not trade for profit or manipulate the market under any circumstances." Binance still holds an impressive $63.36 billion worth of cryptocurrency assets, including over $2 billion worth of USDT, $17 billion worth of Bitcoin, and $8.1 billion worth of Ether.
The recent withdrawals suggest that investors are taking a cautious approach, and the outcome of this lawsuit will be closely watched by the industry and regulators alike. It is important for all companies, including those in the crypto industry, to adhere to regulatory obligations to ensure a fair and transparent market.
Also, read - CZ Defends Binance Against CFTC Complaint of Improper Trading
