Binance, the largest exchange in the world by trading volume is being currently probed by the Commodity Futures Trading Commission (CFTC). Following the news of the investigation, the total market cap of all cryptocurrencies dropped within an hour. The news was revealed by an anonymous source who was privy to the knowledge of the probe.
CFTC Probes Binance Over US Trading Activity
Based on a Bloomberg report, the CFTC wants to know whether Binance has permitted U.S citizens to trade derivatives listed under the agency. The CFTC regulates derivatives trading in the U.S. and Binance isn’t registered under the agency. However, the exchange has not been accused of any violation or misconduct yet.
Changpeng Zhao, Binance CEO, responded via a tweet and regarded the claims in the report as “FUD” (Fear, Uncertainty, and Doubt). The CEO reemphasized the exchange’s stance concerning regulatory protocols. He revealed that Binance takes “compliance to obligations very seriously.”
It’s not a bull market without some FUD.
Ignore FUD, keep BUIDLing.
— CZ 🔶 Binance (@cz_binance) March 12, 2021
The report comes after the crypto exchange hired Max Baucus, a former U.S Senator, as a policy advisor and government liaison. In response to the news, the crypto firm said that Baucus will act as the bridge between the exchange and regulators.
Crypto Market Takes a Hit as Binance is Being Investigated
This is not the first investigation to be launched by the CFTC against a major crypto exchange. Last year, the agency also launched an investigation on BitMEX; and the co-founders were later charged with facilitating unregistered trading.
The news coincides with a period when onlookers are questioning the interference of regulatory bodies in the crypto space. Persistent scrutiny from the regulators may impede the adoption of cryptocurrency by the U.S. mainstream. However, the outcome of the investigation and its impact on the crypto community can’t be predicted.
Nevertheless, the crypto market has taken a hit as the prices of major cryptocurrencies dropped. Following the news, BNB has dropped by 10% while Bitcoin also dipped by 1.29%. Bitcoin plummeted to an intraday low of $55,376.