The post Binance Could Lose U.S. Market Amid Crypto Regulatory Crackdown: Report appeared first on Coinpedia Fintech News
In the past few years, the Binance cryptocurrency exchange has been the leader when it comes to global crypto traded volume and registered volume. According to the latest data by Binance, the company reported a 24-hour trading volume of about $38 billion and over 120 million registered users. However, Binance’s global dominance is seriously threatened by the ongoing global regulatory crackdown.
On March 27, the United States Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Northern District of Illinois, charging Changpeng Zhao (CZ) and Binance for violating Commodity Exchange Act (CEA) and several CFTC regulations.
The CFTC accuses Binance.US of helping United States customers evade financial compliance by using off-shore shell companies to avoid Binance’s KYC-based controls.
Binance To Exit USA?
According to a report by Bernstein Research, the CFTC could force CZ and Binance to cease United States operations in part of the settlement. Since Binance cryptocurrency trading is a global business, Bernstein expects the exchanges to work at all costs to protect their global influence.
“ Binance will look to safeguard its dominant international business, which is its cash cow, and where it has worked on licenses in Europe, Africa, and Australia,” analysts Gautam Chhugani and Manas Agrawal wrote.
The researchers do not, however, expect the recent CFTC action to trigger a cryptocurrency sell-off. Moreover, Hong Kong is becoming a crypto-friendly market that embodies the Chinese banking industry.
The Need For Crypto Regulation
In his defense, Binance and its CEO have contacted crypto-friendly United States senators to explain their predicaments.
“Binance has maintained that the best form of user protection is regulation. Smart regulation will protect both consumers and markets and still allow for innovation and the preservation of crypto’s fundamental value propositions of financial independence and empowerment,” Binance’s letter to US Senators – Warren, Van Hollen, and Marshall – noted.