Bitcoin tumbled Monday to a 10-day low, after the Commodity Futures Trading Commission sued the operator of the world’s largest crypto exchange Binance, its chief executive Changpeng Zhao and some affiliates for alleged violations of the federal laws governing commodities markets.
The largest cryptocurrency
BTCUSD,
lost 3.4% Monday to as low as $26,544 Monday, according to CoinDesk data. Bitcoin has gained almost 70% year-to-date, while still down 60% from its all-time high in 2021.
CFTC alleged that Binance failed to register with the agency, despite its “solicitation of and reliance on customers located in the United States to generate revenue and provide liquidity for its various markets,” according to a filing with the federal court in Illinois Monday.
“Binance and its officers, employees, and agents have instructed U.S. customers to use virtual private networks (VPNs) to obscure their location,” CFTC wrote in the filing.
Binance.com doesn’t provide access to U.S. customers, the company has said, while Binance.U.S., which claims to be a separate legal entity, targets U.S. customers.
Representatives at Binance didn’t respond to a request seeking comment for this article.
U.S. regulators have been doubling down their efforts to increase oversight of the crypto industry, after several major companies collapsed last year, resulting in billions of investors’ losses.
Last week, Coinbase
COIN,
the largest crypto exchange in the U.S., said it received a Wells Notice from the Securities and Exchange Commission,, which could lead to formal charges.
In February, the SEC charged Kraken for failing to register its staking program. The exchange ended the program in the U.S. and paid $30 million in penalties to settle the charges, without admitting or denying the allegations.
Meanwhile, the New York Department of Financial Services ordered stablecoin issuer Paxos to stop minting BUSD, a stablecoin issued by Paxos and branded by the world’s largest crypto exchange Binance. Paxos also received a Wells notice from the SEC, which is considering recommending an action alleging that Paxos failed to register BUSD, as a security.
