CFTC Says Bitcoin, Ethereum and Litecoin Are Commodities in Lawsuit Against Binance and CEO Changpeng Zhao

March 29, 2023 The Daily Hodl

XRP price tags 10-month high — Can a 35% pullback be avoided?

March 29, 2023 Coin Telegraph

Binance

A U.S. regulator called Bitcoin, Ether, and Litecoin commodities in its court filing against Binance. It did not mention XRP anywhere.

XRP (XRP) outperformed its top-ranking crypto rivals over the past 24 hours while reaching the highest price in 10 months.

XRP price tags 10-month high

On March 29, XRP's price surged by nearly 15% to $0.58, its highest level in ten months, outperforming Bitcoin (BTC) and Ether (ETH) in the past 24 hours that rose around 4.5% and 2.75%, respectively.

*XRP/USD daily price chart. Source: TradingView*

The Commodity Futures Trading Commission (CFTC) referred to Bitcoin, Ether, and Litecoin (LTC) as "commodities" in its court filing against Binance. While the U.S. regulatory didn't name XRP, many assumed the token would be categorized as a commodity.

The lawsuit will likely conclude by the end of March, with legal experts believing Ripple has a chance to win. XRP price has rallied 45% month-to-date on similar hopes, including the March 29 price rally, supplemented further by investors' optimistic interpretation of the CFTC court filing.

#XRP bucks the market trend with 8% surge to a 5 month high of under $0.50#CFTC's #Binance filing could classify $XRP as a commodity instead of a security as alleged by #SEC in #Ripple vs SEC case@Ripple's CTO argument gains traction and XRP price impacted by case progression pic.twitter.com/eFB28Ehmj0
— LaCryptoLycus (@CryptoLycus) March 28, 2023

35% XRP price correction ahead?

XRP's price rally brought it closer to the breakout target of $0.60. However, the possibility of a big correction after the SEC vs. Ripple ruling as a "sell the news" event remains.

Related: Why is XRP price up today?

Technical indicators also show the XRP/USD pair facing the upper trendline of its prevailing rising channel. Thus, a correction toward the lower trendline is now in play, with the downside price target around $0.38 in April, down 35% from current price levels.

On a broader timeframe, the rising channel appears like a bear flag, a bearish continuation technical indicator.

*XRP/USD weekly price chart. Source: TradingView*

The completion of the flag pattern could see XRP price falling to $0.189 by June, down over 65% from current price levels

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

SEC chief Gary Gensler to face Congress grueling over crypto policy

March 29, 2023 Coin Telegraph

CFTC

FSC chief noted that their primary focus would be setting the groundwork for crypto regulations in the U.S.

The United States Securites and Exchange Commission chief Gary Gensler is set to testify before the the House Financial Services Committee for the first time.

In an interview, Patrick McHenry, chairman of the Financial Services Committee, confirmed that the SEC chief would have to face Congress' questions over his approach towards the crypto ecosystem on April 18.

#NEW: Chairman @PatrickMcHenry confirms @SECGov Chair Gary Gensler will testify before the House Financial Services Committee on April 18th.

Republicans will hold @GaryGensler accountable for his flagrant disregard for the law, jurisdiction, and the APA.

pic.twitter.com/XRwcrm79PS
— Financial Services GOP (@FinancialCmte) March 28, 2023

The House of Representatives Committee on Financial Services is in charge of regulating all aspects of the financial services sector, including banking, securities and digital assets in the U.S.

During his interview, McHenry noted that it will be the first oversight hearing of the SEC. The hearing will be focused on Gensler’s rulemaking and his approach towards crypto assets. He added further that the committee will have a large general oversight over the SEC and would take a serious approach in terms of “laying down a regulatory sphere for digital assets.”

SEC chief’s approach towards crypto has turned many heads over the years, and many from the Democrat party have voiced their concern against his approach. Many in the crypto industry believe that the party’s anti-crypto stance could be disastrous for its 2024 election campaign.

Dennis Porte, the co-founder of the Satoshi act fund, said that many pro-crypto and pro-Bitcoin Democrats are lining up to voice their opposition to their own party’s stance.

Pro-Crypto & Pro-#Bitcoin Democrats are lining up to voice their opposition to their own party’s stance.

Democrats are on the verge driving their own voters away and losing support from this important new voter block. In my opinion it could cost Democrats the 2024 election. pic.twitter.com/3kZkTOAjhz
— Dennis Porter (@Dennis_Porter_) March 27, 2023

The U.S. regulators have taken a hard stance in crypto with the start of 2023, with the SEC issuing Wells notice to a number of crypto firms including Coinbase and BUSD. On the other hand, CFTC has filed a new lawsuit against Binance. However, the crypto fraternity has always pointed to the fact that regulations would be decided by Congress and not individual agencies.

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Binance CEO CZ Responds to US Regulator’s Charges

March 29, 2023 Bitcoin.com

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March 28, 2023 The Daily Hodl

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March 28, 2023 Bitcoin.com

Binance-CFTC FUD puts BNB price at risk of drop toward $200

March 28, 2023 Coin Telegraph

Binance-CFTC FUD puts BNB price at risk of drop toward 0

Binance Coin

Recent BNB price trends show that the token declines in the short term after regulatory crackdowns. However, this time the correction may last longer.

BNB (BNB) looks set to wipe out its March gains entirely as investors turn their attention to the latest regulatory crackdown on Binance, the world's leading crypto exchange by volume.

BNB price logs worst daily performance in over a month

On March 27, the U.S. Commodity Futures Trading Commission sued Binance and its chief executive Changpeng Zhao (CZ), alleging that the company illegally offered crypto derivatives services to Americans and facilitated illicit financial activity.

BNB dropped by over 5.5% to $305 on the announcement day, logging its worst daily performance since Feb. 13, when its price dropped by over 5.8% due to another regulatory crackdown involving Binance-branded stablecoin, BUSD.

*BNBUSD daily price chart. Source: TradingView*

BNB's price stabilized on March 28, wobbling between gains and losses as CZ refuted CFTC's allegations. However, the BNB/USD pair risked falling further if one considers its recent response to regulatory actions.

For instance, the New York regulator's BUSD crackdown in February 2023 preceded a 15%-plus BNB price decline.

*BNB price reaction to regulatory crackdowns since 2022. Source: TradingView*

Similarly, BNB plunged by up to 10.75% after the Dutch Central Bank slapped a $3.4 million fine on Binance in July 2022 for offering unlicensed crypto services. It also dropped 25% in February 2022 after Binance halted its operations in Israel, fearing a crackdown.

Rising wedge breakdown underway

The Binance-CFTC FUD has triggered a bearish reversal setup previously covered in February.

This setup involves a rising wedge pattern whose breakdown could lead to a 25% price correction toward $250 by the end of March. The March banking crisis and its positive impact on top-ranking crypto assets may have delayed the bearish call.

*BNB/USD daily price chart featuring rising wedge breakdown setup. Source: TradingView*

Simultaneously, BNB eyes an extended price decline toward $200 due to the formation of another rising wedge pattern on the daily chart, as shown below.

Therefore, BNB price could drop by as much as 30% by April when measured from current price levels.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Here’s why CFTC suing Binance is a bigger deal than an SEC enforcement

March 28, 2023 Coin Telegraph

Binance

Market observers pointed out that the CFTC goes after the bigger fish, and its regulatory action often proves fatal for the crypto companies.

The United States Commodity Futures Trading Commission (CFTC) sued crypto exchange Binance for trading and derivatives laws violations. The lawsuit, filed on March 27, alleged that the global crypto exchange offered its derivatives trading services to U.S. customers without applying for a derivatives license.

The lawsuit from the commodities watchdog in the U.S. took many by surprise, with market observers and reporters claiming it to be a political move. Eleanor Terrett, a Fox news reporter, tweeted that sources close to the CFTC suggest the commodities regulator decided to go for a lawsuit to show the Securities and Exchange Commission (SEC) that this is a commodities issue rather than a securities one.

than a securities one. They also say "Vegas odds" have the @SECGov rushing out a similar lawsuit against @binance as a counter.
— Eleanor Terrett (@EleanorTerrett) March 27, 2023

The lawsuit accuses Binance of prioritizing commercial success over regulatory compliance. It said that Binance disregarded applicable federal laws while boosting Binance’s U.S. customer base. The U.S. regulator has accused Binance and its CEO, Changpeng “CZ” Zhao, of seven violations of the commodities exchange and act (CEA), and controlled foreign company (CFC) rules.

Apart from the regulatory violations, the suit also specifically targets Binance’s U.S. trading arms, Merit Peak and Binance.US. The CFTC alleged that Binance and its affiliated entities are a common enterprise with an ultimate beneficial owner (UBO) and under the direct control of CZ.

*An excerpt from the CFTC lawsuit. Source: CFTC*

In the suit, the CFTC has demanded that Binance and CZ should be banned from engaging in any of the conduct described in this case, such as trading on registered entities, holding any commodity interest or directing any trading of digital assets. The CFTC also wants Binance to pay back the trading profits, revenues, salaries, commissions, loans and fees derived from U.S. persons, and pay civil penalties for the violations.

The CFTC lawsuit against Binance is a big deal for the crypto industry, given its general belief that the CFTC doesn’t pursue small crypto players without merit. This was evident in the Bitfinex case back in 2018, in which the crypto exchange settled with a hefty fine in 2021.

Adam Cochran, a crypto observer, reiterated a similar stance, saying the CFTC “doesn’t go after small frequent cases like the SEC,” adding that “It’s a different beast and its cases are often fatal.”

In his Twitter thread, Cochran commented that the early evidence gathered by the CFTC could prove fatal for Binance. He added that Binance could either fight the case in the U.S. or settle it outside the court, but in all likelihood, it would be forced to cease operations in the United States.

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Binance saw $850M withdrawal prior to CFTC indictment: Data

March 28, 2023 Coin Telegraph

Binance

In twelve hours preceding the indictment, almost $1.5 billion of crypto left several centralized platforms, according to Thanefield Capital.

Right before the exchange platform Binance and its CEO Changpeng Zhao have been accused of regulatory violations by the United States Commodity Futures Trading Commission (CFTC), almost a billion dollars in crypto reportedly left the platform’s wallets.

According to the Thanefield Capital data research, a few hours before the Binance CFTC indictment, which occurred at 3 pm UTC on Monday, March 27, an unusually large amount was withdrawn across centralized exchanges. In 12 hours preceding the indictment, almost $1.5 billion left such platforms as Binance, Kraken, Coinbase and Bitfinex. More than half of it, or $850 million, was withdrawn from Binance.

Just one hour after the announcement, Binance saw an additional $240 million withdrawn. According to the data from Nansen, in the past 24 hours, more than $400 million were withdrawn only in Ethereum-based funds.

However, Binance still holds $63.36 billion worth of cryptocurrency assets: this includes over $2 billion worth of USDT, $17 billion worth of Bitcoin, and $8.1 billion worth of Ether.

CFRC filed a suit against Binance and CZ in the U.S. District Court for the Northern District of Illinois. According to the Commission, that’s been investigating Binance’s business since 2021, the company failed to meet its regulatory obligations by not properly registering with the derivatives regulator. Binance allegedly conducted transactions in Bitcoin, Ether and Litecoin for U.S. citizens since at least 2019.

The largest crypto exchange in the world has also been under investigation by the Internal Revenue Service (IRS) and federal prosecutors, who have examined its adherence to Anti-Money Laundering rules. The Securities and Exchange Commission (SEC) conducts its own inquiry on whether Binance allowed U.S. traders to access unregistered securities.

Changpeng Zhao has already rejected allegations from the CFTC, arguing that the crypto exchange “does not trade for profit or 'manipulate' the market under any circumstances.”

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Binance Bitcoin balance drops by 3.4K BTC within 24 hours of CFTC lawsuit

March 28, 2023 Coin Telegraph

Binance

Binance’s Bitcoin balance was reduced by over 3,900 BTC in the past week, of which 3,400 BTC were pulled out in the last 24 hours alone.

Soon after the United States Commodity Futures Trading Commission (CFTC) sued crypto exchange Binance and its CEO Changpeng “CZ” Zhao for regulatory violations, the entrepreneur sought damage control measures while rejecting allegations of market manipulation. However, investors responded by pulling over 3,400 Bitcoin (BTC) from Binance within 24 hours of the announcement, anticipating market fluctuations.

“Binance.com does not trade for profit or “manipulate” the market under any circumstances,” stated CZ, responding to the CFTC’s allegations. However, episodes involving crypto entrepreneurs such as FTX’s Sam Bankman-Fried and Terraform Labs’ Do Kwon have shaken investor confidence in the crypto ecosystem.

My Response to the CFTC Complaint | Binance Blog https://t.co/TadyotM7HN
— CZ Binance (@cz_binance) March 27, 2023

Investors have started moving assets away from Binance to lessen the impact of a shutdown if it were to happen. As a result, Binance saw a reduction in its total Bitcoin balance while other exchanges registered an increase, as shown below.

*Bitcoin balances on exchanges overview. Source: coinglass.com*

Binance’s Bitcoin balance was reduced by over 3,900 BTC in the past week, of which 3,400 BTC were pulled out in the last 24 hours alone.

*Bitcoin balance on Binance. Source: coinglass.com*

Competing exchanges, including Coinbase, Bitfinex and Gemini, recorded an increase in BTC reserves during the 24-hour timeframe.

*Bitcoin balance on crypto exchanges. Source: coinglass.com*

It is important to note that Bitcoin balances on crypto exchanges have declined since March 20. Over the last seven days, nearly 27,000 BTC left major exchanges.

Alongside the CFTC’s lawsuit against Binance and CZ, a federal judge temporarily halted a proposed deal between Voyager and Binance.US.

*Judge Jennifer Rearden approved the United States Department of Justice’s emergency motion. Source:* *Court Listener*

As Cointelegraph reported, Judge Jennifer Rearden of the U.S. District Court for the Southern District of New York granted the emergency stay on March 27, halting the potential deal between Voyager and Binance.US until a decision is made on the Department of Justice’s appeal against the bankruptcy plan.

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CFTC

XRP price tags 10-month high

35% XRP price correction ahead?

BNB price logs worst daily performance in over a month

Rising wedge breakdown underway

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