Bitcoin and Ether are down 3% after CFTC sued Binance and its CEO over US regulatory violations
- Cryptocurrencies are trading lower after CFTC sued major exchange Binance for regulatory violations.
- Bitcoin and Ether are trading around $27,000 and $1,700 respectively, about 3% lower over the past 24 hours.
Two major cryptocurrencies — Bitcoin and Ether — are trading about 3% lower on Monday, after the Commodities Futures and Trading Commission, or CFTC, sued Binance, its CEO Changpeng Zhao, and former chief compliance officer Samuel Lim, for regulatory violations.
Bitcoin and Ether prices are around $27,000 and $1,700 per token respectively, per CoinMarketCap data. Both cryptocurrencies had hit all-time highs when they surged past $69,000 and $4,800 in November 2021.
The news also spurred ether outflows from Binance to the tune of hundreds of millions of dollars over 24 hours, CoinDesk reported Tuesday, citing data from Nansen, a blockchain data analytics firm.
The US regulator said in a complaint filed in a Chicago federal court Monday that Binance breached eight provisions of the Commodity Exchange Act.
The CFTC said Binance "lucrative and commercially important 'VIP'" customers, including institutional customers in the US while disregarding registration and regulatory requirements under the US law. The federal agency is requesting the court to order monetary penalties on the exchange, as well as trading and registration bans.
Binance's Zhao wrote in a Monday blog that the CFTC's complaint was "unexpected and disappointing" as the exchange has been "working cooperatively with the CFTC for over two years."
"Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint," he added.
A Binance spokesperson told Insider in an emailed response for comment late Monday that the exchange has made "significant investments" over the past two years to ensure it doesn't have active US users on its platform. Measures include ramping up its compliance team by more than seven times and spending an additional $80 million on external partners to support its compliance program.