The crypto industry in the United States is being turned upside down. Not only is the Securities and Exchange Commission very busy, the Commodities Futures Trading Commission (CFTC) also rules the market with a heavy hand. Now Binance is screwed, and experts say it could spell the beginning of the end for Binance’s US business.
Binance under fire by CFTC
In addition to the ‘regular’ department, Binance also has a subsidiary, Binance.US. This is because the regular branch of the company in the US was no longer allowed to operate. Binance.US was then founded in order to be able to serve American customers as usual.
But the CFTC sued Binance this week, not Binance.US. Among other things, the crypto exchange would secretly refer American customers to the international branch of Binance, for example to have access to more exotic cryptocurrencies. The American branch is more strictly regulated, which means that the supply is a lot smaller.
The non-US branch of the company would also engage in market manipulation. Almost 300 accounts of the company itself are said to be actively trading against customers. Binance CEO Changpeng Zhao (CZ) denied the allegations.
Due to all the bad news, customers withdrew about $ 2.2 billion in a short time. However, it wasn’t enough bank run cause permanent damage to the company. Binance’s international arm has, according to CoinGecko at the time of writing about 75 billion dollars on the balance sheet.
Problems for crypto by Binance
Cointelegraph has spoken with several individuals from the crypto industry. SmartBlocks CEO Mark Fidelman stated that the lawsuit could undo years of work by Binance.US. This company has been working on favorable regulations for crypto in the US since its inception.
But the lawsuit could mean the end of the story for Binance (in the US), according to Swan Bitcoin’s Terrence Yang. The lawsuit also mentions Binance.US and the investment fund Merit Peak, which Binance founder Changpeng Zhao (CZ) would have direct control over.
Jason Allegrante of the FireBlocks legal department stressed to Cointelegraph that the lawsuit could accelerate the exodus of crypto companies from the United States. “(Problems in) Binance would cause a serious lack of liquidity,” the lawyer stated.
According to some, that exodus has been going on for a long time. Ripple CEO Brad Garlinghouse even recently urged companies in the sector to leave the US because of the unclear policy, according to him.
