After the news that civil enforcement action has been taken against Binance by the CFTC, the price of Binance token (BNB) has plunged by 5%.
At the time of this writing, the price of BNB is valued at $310. The current price level shows that in the past seven days, BNB has dropped by 7.5%.
But in the past 30 days, the price is still up by 2.5%. Moreover, as compared to its price at the start of 2023, the current price is still up by 26%.
In its lawsuit, CFTC has accused Binance of committing some serious crimes.
For instance, CFTC accused Binance allowed derivatives transactions on its platform without informing and taking permission from CFTC.
Furthermore, it has also been claimed that Binance did not ask for id verification from the consumer before trading.
What Does CFTC Plan To Achieve?
The CFTC has requested severe consequences for Binance, such as prohibiting the exchange from trading and registering permanently.
In response, Binance has reacted strongly to the allegations made by the regulator. Binance so far has remained very proactive in coping with such allegations.
As Binance is about to undergo a long-lasting legal battle against CFTC, its native coin is likely to become vulnerable.
In case things had gone nasty for Binance, the platform can also be banned by the authorities.
All these currencies have created uncertainty in the market. Regardless of the outcomes of this case, the current scenario is not positive for Binance.
It is quite possible that in the coming few days, there might be strong sell pressure on BNB and crypto whales might sell the Binance token in abundance.
Markets experts have claimed that in case authorities decided to ban Binance, the crypto market can see a far bigger crisis than the fall of FTX.
Coinbase is another massive exchange that has gone under a legal battle against the SEC. Experts further added that CFTC’s expectations are highly realistic and driven by clear bias.
The Technical Outlook of Binance Coin (BNB)
The technical outlook shows that BNB is in the right direction to replicate further increases in its price. But its RSI is dropping below the 70 mark.
This shows that before reaching the oversold zone, its price might decline a couple of times. In the upcoming days, BNB might drop below the $300 mark. Hitting the $275 mark is very much possible for Binance.
Now, bringing the lawsuit back into the scenario, things can go far worse for BNB than expected. According to CFTC Binance has instructions for its staff and clients to circumvent the regulatory controls of CFTC.
They also added that Binance deliberately organized its operations in a way that would exempt it from the registration requirements imposed by the United States.
CFTC also added that Binance’s CEO used 300 different accounts to carry on the trading.
The Market quickly responded to the last allegation and labeled it as damning. Experts said that regulators are on a mission to destroy Binance’s business.
Conversely, Binance has started to defend itself against the CFTC’s action. Binance’s CEO Zhao has already published a blog denying all these allegations.
Legal experts do believe that it will be nearly impossible for CFTC to get what they seek.
It is not that easy to ban a multi-billion dollar firm, legal experts further added. But the ongoing trial will surely damage Binance’s goodwill.
In addition to that, Binance Token will also go down further. As long as this case will not reach its conclusions, BNB will remain vulnerable.
Hence investors need to avoid investing in Binance coins. As of now the future of Binance remains uncertain.
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