Bitcoin Falls After CFTC Sues Crypto Exchange Binance

Cryptocurrency prices fell on Monday morning after the Commodity Futures and Trading Commission (CFTC) initiated court filings against Binance, the biggest crypto exchange in the world, for allegedly flouting trading rules. The price of Bitcoin softened 3% to $26,955, while Ethereum fell 3.5% to $1,704.

The CFTC accused Binance of violating eight provisions of a commodities trading law designed to uncover money laundering and terrorism financing. The lawsuit, if successful, could severely impact the operations of the market’s crypto exchange leader. 

Bitcoin was coming off a good March, during which time it advanced 16%, while Ethereum gained 6%. Although bitcoin’s March rally had already started to slow in the last week, its latest slip was largely down to the news about Binance. Crypto-exposed equities suffered from the news, too. Coinbase and Microstrategy each fell 10%.

The CFTC’s action against Binance is the latest episode in this year’s regulatory crackdown on crypto firms. Monday’s initial drop was the biggest move for Bitcoin since March 22, when the Securities and Exchange Commission (SEC) issued Coinbase a notice warning that it identified potential violations of US securities law.

Crypto investors continue to be edgy. Although the industry has navigated a deep crypto winter that saw the downfall of major crypto players like FTX and a major loss of industry value, investors have been hopeful of a continued rise in prices as Bitcoin edged toward $30,000.