Bitcoin Slumps after CFTC Files Suit against Binance

Bitcoin Slumps after CFTC Files Suit against Binance

Bitcoin (BTC) plunged below $27,000 after the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its founder Changpeng Zhao over allegations that the exchange knowingly offered unregistered crypto derivatives products in the U.S., a violation of federal law.

The BTC/USD trading pair on the Coinbase exchange dropped to $26,525, its lowest point since March 17, data from TradingView showed. The largest cryptocurrency by market capitalization was recently trading at $26,978, down 3.1% in the past 24 hours.

“As far as I can see the crypto community is putting this news on the ‘here we go again’ pile,” Julius de Kempenaer, senior technical analyst at, told CoinDesk.

Kempenaer said the Binance-CFTC lawsuit “very likely” sent BTC’s price lower. However, he added that the lawsuit’s “implications are unclear,” even as it offered the latest example of increased regulatory scrutiny, a trend that the industry will continue to monitor closely. He said that bitcoin might fall to its previous breakout level near $25,000.

“As long as that level holds, the break from a long-term bottoming formation is still in play,” he said. But he added that “taking out heavy overhead resistance range between $29,000 and $32,000 will free up the way for a much stronger move higher.”

Monday’s Binance-CFTC news caught traders who bet on a price gain off-guard. They liquidated some $39 million worth of BTC’s long positions, according to data from Coinglass.

In the lawsuit against Binance filed in U.S. District Court in Illinois, the CFTC called several cryptos including BTC, ether (ETH), litecoin (LTC), tether (USDT) and Binance USD (BUSD) commodities. U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has previously suggested that proof-of-stake tokens are securities.

ETH, the second-largest cryptocurrency, fell below $1,700 before recently rebounding to $1,703, still off 3.6% from Sunday, the same time. BNB, the native token of the Binance-initiated blockchain network BNB Chain, has declined by over 5% to about $310 from roughly $327 a day ago. Litecoin (LTC) was trading down nearly 4.8%.

The regulatory unclarity is a “concerning” factor for moving the markets, especially the specific allegations contained within the CFTC suit, according to Riyad Carey, research analyst at crypto data firm Kaiko, told CoinDesk.

“Binance is by far the largest crypto exchange in the world and thus has an outsized impact on markets,” Carey said, although he added that the drop in markets hasn’t been “too severe,” given the importance of this regulatory news.

Some crypto-related stocks also dropped. Shares of exchange Coinbase (COIN) and bitcoin miner Marathon Digital Holdings (MARA) slid by 8% and 6%, respectively.

Equity markets were mixed Monday afternoon as investors weighed the announcement that regional lender First Citizens BancShares would buy most of the business of Silicon Valley Bank.

The S&P 500 and Dow Jones Industrial Average (DJIA) rose by 0.4 and 0.8%, respectively. The tech-heavy Nasdaq was down 0.1%. # Bitcoin Slumps after CFTC Files Suit against Binance

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