Bigger Lawsuit – The Binance Lawsuit 🥊

Bigger Lawsuit – The Binance Lawsuit

Cryptocurrencies are already facing an industry-defining lawsuit with the Ripple case we discussed last week. The outcome of that decision could determine whether cryptocurrencies are deemed securities or not, with major regulations hanging in the air. As we await the verdict from a federal judge in New York, another lawsuit has appeared that could arguably be larger.

On Monday, the Commodity Futures Trading Commission filed a lawsuit against Binance, the largest cryptocurrency exchange in the world. That’s right, Binance is larger than Coinbase and is led by visionary and crypto icon Changpeng Zhao, commonly known as CZ. The CFTC accused Binance of violating US trading laws by offering unregistered crypto derivative products like futures and options contracts, and intentionally “coaching” their customers to circumvent compliance controls to trade these instruments. There are many talking points on this lawsuit, the first one being Binance’s regulation evasion per say. The CFTC claims that Binance’s decision to not have a headquarters is simply to avoid regulations as CZ has said numerous times that HQ is simply wherever he is at any time, and that American consumers are still in danger. It is also a heavy subject considering this is normal in the crypto industry, with users utilizing VPNs to trade different crypto products that aren’t allowed in areas like the US without being registered and regulated. The possible effects of this lawsuit are grand, with the CFTC holding the power to prevent Binance from registering a derivatives exchange and their products forever. Analysts estimate that the US makes up for 16 percent of the derivatives revenue, which would be a major loss for the business.

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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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