Regulatory Storm Looms as BNB Price Falters - Will the Crypto Giant Prevail?
Binance Coin (BNB) fell 5% to $308 in response to the CFTC filing a civil enforcement action against Binance and its CEO, raising concerns about the future of the exchange and the broader crypto market as regulators target the industry.
Binance Coin (BNB) experienced a 5% drop within 24 hours, falling to $308 due to the news that the CFTC filed a civil enforcement action against Binance and its CEO, Changpeng Zhao. Over the past week, BNB declined by 7.5%, but it has risen by 2.5% in the last 30 days and 26% since the beginning of the year.
The CFTC has made serious allegations against Binance, including claims that the exchange facilitated derivatives transactions for US customers without registering with the CFTC and allegations that it failed to mandate customer ID verification before trading on the platform. The CFTC seeks harsh penalties for Binance, including "permanent trading and registration bans."
Binance has strongly responded to the regulator's charges, indicating that it may not face an existential threat. BNB's chart suggests that it might see further gains, with its relative strength index dropping from 70 a few days ago to under 50 today. This implies that BNB could fall further before becoming oversold. The token's 30-day moving average is still due to fall below its 200-day average, which might not happen for another week.
Therefore, BNB's price could drop below $300 soon, possibly as low as $275, as seen on March 11. If the CFTC's charges are valid, Binance and its BNB coin could face even worse consequences. These allegations include Binance instructing employees and customers to evade CFTC compliance controls, intentionally structuring its business to avoid US registration requirements, and Zhao operating around 300 separate Binance accounts that engaged in insider trading activity on the platform.
These serious allegations have led many industry commentators to believe that the regulator could significantly damage Binance's business. Binance has begun defending itself against the CFTC's action, with Zhao already writing a blog post denying the charges.
If the CFTC wins the case, Binance could face an existential threat and significant financial penalties, which could result in BNB's price falling further. However, the situation remains uncertain, making it unwise to make strong predictions.
This is not a financial advice.
