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Mooners & Shakers: Bitcoin dips after CFTC sues Binance but MicroStrategy buys more

A US regulator has slapped global crypto exchange Binance with a lawsuit, which has sent the price of Bitcoin and other cryptos a little lower.

Rob Badman
4 min read
1:57PMMarch 28, 2023
Stockhead
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We’re not out of the woods yet, Bitcoin! Photo: iStock
We’re not out of the woods yet, Bitcoin! Photo: iStock

US regulator the Commodity Futures Trading Commission (CFTC) has slapped global crypto exchange Binance with a lawsuit, which has sent the price of Bitcoin and other cryptos a little lower on Tuesday.

Meanwhile, MicroStrategy, founded by the biggest Bitcoin moonboy of them all – Michael Saylor – has bought 6455 more BTC for $US150 million. And, for some reason, that nearly always sinks the price of BTC. So thanks for that, Michael.

Nevertheless, the dip hasn’t been overly alarming at this point and, in fact, at the time of writing, BTC seems to have stabilised just above the $US27k zone.

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So what’s up with the CFTC and Binance?

The CFTC has filed a lawsuit against Binance and its founder Changpeng Zhao (aka CZ), alleging the exchange has wittingly offered unregistered crypto derivatives products in the US, and has thus violated federal law.

Maybe the SEC and Gary Gensler have taken an annual leave day off or something.

“Defendants have disregarded applicable federal laws while fostering Binance’s U.S. customer base because it has been profitable for them to do so,” claims the CFTC.

The crypto market is down a bit on the news, with the price of Bitcoin sinking below $US27k earlier. But is this just a case of a little bit more regulatory FUD (fear, uncertainty and doubt) swirled into the mix that will likely quickly blow over? Possibly.

Not quite sure what was going on with CZ’s initial cryptic tweet in response, which simply read: “4”.

Thankfully, the exchange boss added a far-more-detailed response several hours later, in which he noted: “Today, the CFTC filed an unexpected and disappointing civil complaint, despite our 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 characterisation of many of the issues alleged in the complaint.”

In his statement CZ points to Binance’s adherence to compliance, registrations and licences and commitment “to transparency and co-operation with regulators and law enforcement – in the US and globally”. You can read more on that here.

Some in the crypto Twittering space, however, seem to think it’s the beginning of the end for Binance.

MORE FROM STOCKHEAD: Japanese giants eye crypto moves | Airdrops on the way | Firms urged to hold Bitcoin

VC Adam Cochran, for instance, wrote a mega thread on why he thinks this could be a “death blow” for the crypto industry’s biggest exchange, calling the CFTC “a different beast” from the SEC, with its cases often proving “fatal”.

Here’s his potential silver lining for a CFTC victory, however … ETH proven as a commodity, like BTC, and not a security, as well as an increase in clarity and transparency for the industry as a whole.

Cochran is certainly pushing a pessimistic narrative with regards to what happens to Binance from here.

It’s a pretty big call to write off the exchange, especially as it’s a mega global beast that’s not just tied to the US market.

On another note, though, one thing’s for sure, the US regulatory crackdown on crypto companies has ramped up in a way the industry has never seen before.

And it’s interesting that it’s coinciding at a time of great uncertainty regarding US banks and the US economy and dollar.

Is the US government concerned about a potentially increasing flight to Bitcoin as a safe haven? Popular crypto YouTuber Tyler Strejilevich certainly thinks so.

Top 10 overview

With the overall crypto market cap at $US1.17 trillion at 1pm Tuesday (AEDT) down about 3 per cent since noon Monday, here’s the state of play among top 10 tokens – according to CoinGecko.

Cryptocurrency prices for Tuesday, March 28. Source: CoinGecko
Cryptocurrency prices for Tuesday, March 28. Source: CoinGecko

As you might expect, given the Binance news, the exchange’s native token BNB is one of the hardest-hit coins in the crypto majors today. Although, to be fair, it’s not haemoraged too badly at this point.

Bitcoin, as mentioned earlier, has managed to stem the bleeding on its paper cut for now pretty well, too, having clawed back a few hundred of those dodgy US dollars since earlier in the day.

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Hang, on … what? XRP is up 6.4 per cent amid all this Debbie Downer-ness, today? Yep. Okay, then we’d best bite … why?

We’re putting it down to this … some media traction around the XRP-friendly lawyer John Deaton suggesting that XRP’s price could surge if Ripple Labs wins its ongoing legal battle with US regulator the SEC.

It’s hardly an amazing new development or news, that. Nevertheless, the “XRP Army” were digging it.

Uppers and downers: 11–100

Sweeping a market-cap range of about $US7.8 billion to about $US410 million in the rest of the top 100, let’s find some of the biggest 24-hour gainers and losers at 1pm Tuesday (AEDT). (Stats based on CoinGecko.com data.)

PUMPERS

  • Flare (FLR), (market cap: $US455 million) +7.7 per cent
  • GMX (GMX), (mc: $US623 million) +5.9 per cent
  • OKB (OKB), (mc: $US2.55 billion) +1.9 per cent
  • Stellar (XLM), (mc: $US2.46 billion) +1.2 per cent
  • Maker (MKR), (mc: $US607 million) +0.8 per cent

SLUMPERS

  • Arbitrum (ARB), (market cap: $US1.46 billion) -11.9 per cent
  • Stacks (STX), (mc: $US1.22 billion) -8.9 per cent
  • Mina Protocol (MINA), (mc: $US638 million) -8.7 per cent
  • Optimism (OP), (mc: $US646 million) -8.4 per cent
  • Trust Wallet (TWT), (mc: $US454 million) -7.5 per cent

Around the blocks

Some pertinence and randomness that stuck with us on our morning moves through the Crypto Twitterverse.

This content first appeared on stockhead.com.au

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Original URL: https://www.theaustralian.com.au/business/stockhead/mooners-shakers-bitcoin-dips-after-cftc-sues-binance-but-microstrategy-buys-more/news-story/37468343acad6b54b5879baca211d49b