The world’s leading crypto exchange, Binance, is purportedly being investigated by the US Commodity Futures Trading Commission for allowing residents to trade derivatives without the necessary registration. Although Binance CEO CZ called the development “FUD,” the crypto market reacted with a sudden price drop.
Citing people familiar with the matter, Bloomberg reported the CFTC had begun an investigation aiming to determine if Binance has violated any US rules. More specifically, the Commission seeks to find out if the exchange allows US citizens to buy and sell crypto derivatives without being registered with the organization.
Nevertheless, the coverage reassured that Binance hadn’t been accused of misconduct yet, and the investigation might not lead to enforcement action.
As previously established, the CFTC considers some cryptocurrency assets, such as Bitcoin and Ethereum, as commodities and has claimed jurisdiction over their futures and other derivatives options.
A Binance spokesman noted that the exchange will take a “collaborative approach in working with regulators around the world, and we take our compliance obligations very seriously.”
The company’s CEO, Changpeng Zhao, indirectly commented on the development, saying that “it’s not a bull market without some FUD,” and urged his followers to ignore it. FUD is a popular term, especially in the crypto space, meaning – fear, uncertainty, and doubt.
Shortly after the news broke, bitcoin, and most alternative coins, dumped in value. The primary cryptocurrency lost over $1,500 from $56,500 to about $55,000. As of writing these lines, the asset has bounced off and sits above $55,500.
Somewhat expectedly, Binance’s native cryptocurrency had it even worse. BNB dropped by 10% from $275 to $250 in a matter of minutes. Similarly to BTC, though, it has reacted positively following the nosedive and currently trades at $265.