Bitcoin has been facing increasing headwinds lately, with the Commodity Futures Trading Commission (CFTC) filing a lawsuit against Binance, one of the world’s largest cryptocurrency exchanges. According to the CFTC, Binance allowed US customers to trade in derivatives products without proper registration and oversight as required by CFTC rules. This is a significant blow for Bitcoin, as it could potentially lead to other regulatory issues that would limit its adoption and use.
CFTC complain against the Chief Compliance Officer Lim and Zhao
The CFTC complaint, as presented, alleges that Zhao and Chief Compliance Officer Lim collaborated on a plan to direct the Binance enterprise. However, this was to violate the Commodity Exchange Act (CEA) and associated CFTC regulations.
The strategy was implemented through a complex network of companies. All this with the intention of shielding Binance from regulatory scrutiny in any of the areas where it operates. This tactic was used to avoid having to comply with existing laws in each jurisdiction.
At the start of the week, Bitcoin was caught in a downward trend against its US counterpart. However, BTC/USD pair experienced a 3.0% plunge on Monday and dipped beneath $27,000 for the first time since mid-March.
However, this marked an abrupt change from its previous bullish market performance. Thus, reflecting a general trend of crypto volatility and instability in recent months.
Furthermore, it could have implications for the entire cryptocurrency market, leading to increased scrutiny from regulators around the world. All of this could lead to tighter regulations and a decrease in investor confidence in digital currencies.
