News
Binance in a tight spot as U.S. Justice Department considers fraud charges
DoJ hesitates to charge Binance as they are afraid indicting the exchange could trigger a situation similar to FTX collapse.
- DOJ plans to press charges against Binance.
- The BNB chain and BNB token get negatively impacted by these events.
In the past month, Binance[BNB] has come under intense regulatory scrutiny, facing significant challenges from authorities. These events have cast a considerable impact not only on the exchange itself but also on the Binance Coin (BNB) protocol. However, Binance’s regulatory concerns were far from over, as the Department of Justice (DOJ) recently got involved with the exchange.
Realistic or not, here’s BNB’s market cap in BTC terms
Legal woes
The DOJ was reportedly contemplating the possibility of bringing fraud charges against cryptocurrency exchange Binance. However, they were exhibiting hesitation due to concerns about the potential negative impact on consumers.
An August 2 report from Semafor, citing sources familiar with the situation, indicated that officials within the Justice Department were wary that indicting Binance could trigger a situation similar to what FTX experienced in 2022. As a result, they were exploring alternatives such as imposing fines or establishing non-prosecution agreements with Binance, aiming to mitigate potential harm to consumers.
The exchange was already under regulatory scrutiny, with reports of a criminal investigation in the U.S. for alleged violations of sanctions against Russia.
Additionally, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance in June, accusing it of offering unregistered securities and operating unlawfully. Furthermore, the Commodity Futures Trading Commission took action against Binance and its CEO, Changpeng “CZ” Zhao, in March, alleging violations of trading and derivatives regulations.
The onslaught of regulatory scrutiny on Binance can have dire consequences for other products related to it as well as the overall crypto sector.
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State of BNB
Amidst all the litigations surrounding Binance, the BNB protocol suffered. According to Token Terminals data, in the past 24 hours, the activity on the BNBchain fell by 4.8%. The revenue generated by the protocol was also affected and declined by 4.2%.
Regarding the BNB token, a correction in its price was noted within the past month. BNB’s value experienced a decline from $247.12 to $237 in the recent week. Interestingly, the trading volume of BNB presented a contradictory trend in comparison to its price shift, manifesting substantial surges. From July onward, the trading volume of BNB surged notably, escalating from 369 million to 550 million.
Source: Santiment
