When the Commodity Futures Trading Commission (CFTC) sued Binance, the biggest cryptocurrency exchange in the world, on Monday morning, cryptocurrency prices went down.
Bitcoin’s current price
According to Coin Metrics, the price fell 3% to $26,955.61. Ether declined $3.5% to $1,704.56.
The Commodities Futures Trading Commission (CFTC) filed a complaint against Binance in a federal court in Chicago on Monday. The complaint said that the exchange had broken eight parts of a regulation for trading commodities that was “meant to stop and find money laundering and terrorism financing.”
Even though bitcoin’s rise in March had already started to slow down in the last week, analyst Dessislava Aubert from crypto data provider Kaiko said that news about Binance was mostly to blame for Monday’s drop. To put it in her words, “any action by U.S. regulators against the largest crypto exchange will have huge effects on the sector.”
The CFTC filed a lawsuit after a CNBC story said that some Binance employees were trying to get around the exchange’s rules in China. Similarly, the CFTC says that Binance told its employees and customers how to get around these safety measures.
Oanda analyst Ed Moya said the news has made some cryptocurrency investors apprehensive, even though many people believed Binance was the intended target. Binance’s success is necessary to ensure the growth and development of a significant portion of the crypto-verse.
Stocks that were tied to the cryptocurrency market also fell. Both Microstrategy and Coinbase fell 10%. About 8% was lost by the mining pools Marathon Digital, Hut 8, and Riot Platforms.
The Nasdaq Composite, which changes a lot when interest rates change, fell 0.6% when bond yields went up. When interest rates go up, the appeal of future earnings, like those promised by businesses that want to grow, goes down.
The CFTC’s complaint against Binance is the latest example of how regulators are coming down hard on crypto firms this year. This has been a major price trigger for bitcoin and has helped it break its historically strong correlation with stocks. This correlation has been at a record low since September 2021.
On March 22, the SEC sent Coinbase a Wells notice telling the exchange that it had found possible violations of U.S. securities law. On Monday, the price of bitcoin fell by a lot.
The cryptocurrency market quickly bounced back from its lows on Monday, but it still ended the day in the red. In response to the bad news from Coinbase on March 22, a similar event took place.
Still, Bitcoin is on track to end the month with a profit. It went up 16% in a month, while ether went up 6%. Experts had said that the March rise could be fading by Monday, but they now see a long-term bullish structure forming.
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