© Reuters
By Ambar Warrick
Investing.com–Prices of and other major cryptocurrencies fell on Monday after Binance was hit by a lawsuit from U.S. regulators accusing the world’s largest cryptocurrency exchange of flouting compliance and regulatory laws. offer illegal derivatives.
The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance, its founder Changpeng Zhao and its former compliance officer Samuel Lim, alleging “deliberate evasion” of US laws.
The complaint says Binance instructed its employees and customers to circumvent compliance checks and likely engaged in insider trading by operating some 300 “house accounts” linked to Mr. Zhao.
The CFTC also accused Binance of operating an illegal derivatives exchange for tokens such as bitcoin and ethereum, which the regulator calls commodities.
The fell 3% after the announcement to $27,143.95, while lost 3.3%. Bitcoin, the exchange’s native token, lost 5.5%, while the overall cryptocurrency market capitalization fell nearly 3%.
The CFTC complaint cites several emails and internal memos revealed by a series of Reuters investigations. The commission is asking for 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 cryptocurrency, which has seen US authorities accuse several high-profile companies of engaging in scams or violating copyright laws. securities.
Recent media reports have suggested that the US Department of Justice has been investigating Binance for facilitating money laundering and terrorist financing activities since at least 2018.
More recently, Coinbase (NASDAQ:), the nation’s largest cryptocurrency 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 violations of securities laws.
These regulatory measures, coupled with the closure of several cryptocurrency-friendly banks in March, further soured investor sentiment towards the space.
It also comes after rising interest rates and a series of high-profile bankruptcies wiped out around 70% of the cryptocurrency market capitalization by 2022.