Binance is an online platform for trading cryptocurrencies. Established in 2017 by Changpeng Zhao, it is currently one of the world's largest crypto exchanges based on trading volume. It provides users with access to a diverse range of cryptos, including Ethereum, and Bitcoin, along with its native token, BNB (Binance Coin).
In addition to trading, Binance also offers other services, acting as a decentralized exchange, a crypto wallet, and a platform for launching and investing in new crypto-based projects. However, as of recently, Binance's value is at stake, facing several fluctuations in the market due to some legal issues with CFTC. With this, there’s only one question in mind, could this endanger the value and price of BNB? Let’s look into it.
In response to the civil enforcement action filed against Binance and its CEO, Changpeng Zhao, by the CFTC, the value of Binance Coin (BNB) has decreased by 5% within the last 24 hours (at the time of writing), causing it to fall to around $310.
Not just that, over the past week, BNB fell by about 7.5%. However, within the past month, it has increased by 2.5%. Furthermore, since the beginning of the year, it has increased by up to 26%. So, what could this mean for Binance?
Binance is currently facing significant accusations from the CFTC (Commodity Futures Trading Commission), who have accused the exchange of allowing derivatives trading for US customers without proper registration and failing to require customers to verify their identities before trading on the platform.
The CFTC is looking to impose severe punishments on Binance, such as "permanent trading and registration bans," but the exchange has responded strongly to the regulator's accusations. As a result, it is not guaranteed that the exchange will face an existential threat.
Source: TradingView
Binance Coin Price Prediction: With CFTC Suing Binance – Does it Mark the End of BNB?
According to BNB's chart, it appears that the exchange token may experience additional growth as its relative strength index (indicated in purple) has fallen from 70 a few days ago to below 50 today.
Source: TradingView
This indicates that BNB may experience additional drops before becoming oversold, especially since its 30-day moving average is expected to drop below its 200-day average.
In other words, BNB's decline is not likely to hit its lowest point until the 30-day moving average drops considerably below the 200-day moving average, a process that could take around a week. Therefore, it is possible that the market might witness BNB's value dropping below $300 soon, considering that the coin was priced as low as $275 on March 11th.
If we are to accept CFTC’s current accusations against Binance, the situation could deteriorate significantly for Binance and its native token BNB, given the severity of the charges. The claims made against the crypto platform include the following:
- Binance has allegedly advised its employees and customers to avoid complying with CFTC regulations.
- Despite catering to customers based in the US, the exchange deliberately set up its operations in a way that allowed it to bypass the registration requirements mandated by US authorities.
- It has been alleged that Changpeng Zhao, the CEO of Binance, oversaw nearly 300 distinct accounts associated with Binance that engaged in insider trading activities on the Binance trading platform.
If this last accusation is proven accurate, it would be highly incriminating and further exacerbate the already intense criticism of the exchange within the crypto community.
So Binance is being sued by the CFTC (USA) for basically having a 'secret' in-house trading desk with 300 accounts.
— wolf (@ImNotTheWolf) March 27, 2023
This states that Binance is basically trading against all of their users, with their 'quant' desk using private transactional data.
It seems they also "sold" it… pic.twitter.com/hk6New85Ri
The accusations against Binance are so severe that several experts working in the crypto industry believe that the regulator has a real chance of inflicting significant harm on Binance's operations.
1/23
— Adam Cochran (adamscochran.eth) (@adamscochran) March 27, 2023
Oh boy https://t.co/2JnbfirRrp
Case is up and it's bad.
This is the CFTC attempting to strike *fatal* blow to Binance, and at first read through... I think they actually have really strong chances here of succeeding in toppling the Binance empire.
Conversely, Binance has started to push back against the CFTC's enforcement action, with CEO Changpeng Zhao writing a blog post refuting the accusations made by the regulator. If the CFTC succeeds in its lawsuit, Binance could be at risk of significant financial penalties and even a possible threat to its business existence.
In that case, Binance Coin (BNB) could experience a considerable decline from its present value. However, it is still too soon to make any confident predictions, and it would be imprudent to take a decisive stance in either direction.
If the market experiences volatility due to Binance's situation, it could impact other players in the industry, such as Coinbase, which recently received a Wells notice from the SEC. The US regulatory authorities are taking a firm stance against the cryptocurrency industry, which could lead to adverse effects on prices throughout the market. Like Binance, Coinbase has also responded vigorously to the SEC's accusations, and it remains to be seen what the outcome will be.
Is it a Good Time for BNB Investment?
Binance has seen significant growth over the years value-wise, and purchasing BNB showed massive returns in the past, given its ATH of $600 back in 2021. But this isn’t the case anymore, given the recent instability over the crypto. Therefore, it would be rather unwise to buy BNB at the moment. As legal action against the company has just begun, the Binance coin may experience further declines in the near future.
In light of the legal action against Binance and the possibility of further falls for BNB, traders who want significant returns may want to consider other cryptocurrencies currently showing potential without any ongoing legal matters.
Moreover, the current legal state of Binance vs. CFTC is at its initial phase, meaning there’s a possibility that the severity of the recent accusation may increase, which in turn could impact and damage BNB’s value further.
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