Crypto markets are sliding this morning following headlines that the CFTC is investigating whether the world's largest cryptocurrency exchange Binance, which isn’t registered with the agency, allowed Americans to buy crypto 'derivatives' - which are regulated by the CFTC - and over 'know your customer' regulations.
Bitcoin slid back below $56k, plunging by $1000 in minutes.
Ethereum - the token behind the NFT craze - dipped below $1750...
In response to the probe, Binance told Bloomberg that it never comments on its communications with regulators, while adding that the company is committed to complying with rules. For instance, Binance blocks U.S. residents from its website and uses advanced technology to analyze deposits and withdrawals for signs of illicit transactions, the company said in a statement.
“We take a collaborative approach in working with regulators around the world and we take our compliance obligations very seriously,” Binance said. The CFTC declined to comment.
The investigation adds to the U.S.’s growing crackdown on crypto. The CFTC has already sued BitMEX for failing to register as a broker, with the exchange’s market share declining since it became a target of regulatory scrutiny. Coinbase Global Inc., the U.S.’s biggest crypto exchange, also disclosed last month that it’s responding to a wide-ranging CFTC probe.
Of course, such regulatory interventions always end up amounting to nothing as those who have followed crypto trading in the past five years know too well (only the Fed tightening monetary policy can burst the bitcoin bubble). Furthermore with a growing number of institutions now adopting crypto, it will be virtually impossible for regulators to squash the sector now that even vain Hollywood artists have adopted it in hopes of peddling their idiotic NFTs.
As such, we expect any dip in crypto to be promptly purchased by the growing number of institutions seeking a cheaper entry price.