A regulator’s charges against Binance have delivered another blow against confidence in the cryptocurrency world.
On the day the charges were announced by the Commodity Futures Trading Commission (CFTC), Monday (March 27), the value of bitcoin slipped by 4%, that of ether stepped down 3.3% and the shares of several crypto-related firms dropped, Seeking Alpha reported Monday.
Among crypto exchanges, Coinbase was down 11%, Bakkt was down 6.7% and Robinhood was down 1%. Crypto miners saw losses as well, with Cipher Mining down 9.4%, Marathon Digital down 8.3%, Riot Platforms down 6.4% and Bit Digital down 6.1%, according to the report.
The report attributed these declines to investor confidence being impacted by the charges against Binance, other recent regulatory actions that have focused on the crypto industry, and an expectation that crypto regulation will be developed in the courts rather than in the legislature.
In a separate report Monday, Seeking Alpha said trading volume on Binance sank to its lowest level over the weekend since 2022 after the company stopped most zero-fee trading.
The CFTC charged Binance and CEO Changpeng Zhao with violations of the Commodity Exchange Act (CEA) and CFTC regulations.
“This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of U.S. law,” CFTC Chairman Rostin Behnam said Monday.
In a statement provided to PYMNTS, Binance said it has been working collaboratively with the CFTC for two years and that it finds the filing “unexpected and disappointing.”
“Nevertheless, we intend to continue to collaborate with regulators in the U.S. and around the world,” Binance said in the statement. “The best path forward is to protect our users and to collaborate with regulators to develop a clear, thoughtful regulatory regime.”
As PYMNTS reported Friday (March 24), crypto’s path to regulatory acceptance is getting longer by the day, and certain alarmist observers even believe the industry might soon be done for in the U.S. entirely.
These concerns follow an alert issued Thursday (March 23) by the Securities and Exchange Commission (SEC) that emphasized to investors that cryptocurrency offerings across the U.S. market may be illegal because they are not registered with the regulator.
A day earlier, Wednesday (March 22), the White House Council of Economic Advisers issued a report in which an entire 35-page chapter was devoted to explaining why use cases of blockchain-based digital assets have not fulfilled their promises and how they present various risks to both consumers and the U.S. financial system.
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