Bitcoin rose above $28,000 on March 29, recovering from regulatory pressures caused by the Commodities Futures Trading Commission (CFTC) filing against Binance.
CFTC alleges Binance violated commodities law
On March 27, the CFTC sued Binance, CEO Changpeng Zhao (CZ), and Compliance Lead Samuel Lim — alleging the defendants had violated commodities regulations.
The complaint — filed at the District Court of Illinois — listed multiple infractions including:
- Illegally soliciting U.S. users.
- Not registering its exchange platform.
- Having no headquarters.
- Failing to prevent and detect money laundering and terrorist financing.
Trader @ImNotTheWolf drew attention to the in-house trading desk mentioned in the filing, saying the long and the short of it is that Binance used the info it had on traders to trade against them.
In the immediate aftermath of the announcement, the platform experienced a surge in withdrawals — with users taking out over $2 billion in funds, according to the Wall Street Journal.
Speaking to CNBC, CFTC Chair Rostin Behnam said the defendants had clear intentions to evade U.S. laws, while having a direct method to access the American market in place.
CZ responded that he was disappointed and surprised by the complaint as Binance had been working cooperatively with the agency for the last two years. He added that “we do not agree” with the allegations, mentioning “incomplete recitation of facts.”
On the news of the CFTC filing, Bitcoin lost 5%, sinking as low as $26,500 — marking a 10-day low.
The leading cryptocurrency then ranged between $26,640 and $27,300 before a break of the range occurred on Tuesday evening (BST).
Around 03:00am ET today, BTC cracked $28,000 — with the preceding 15-minute candles showing BTC turning resistance into support. This level was the approximate pre-Binance lawsuit price.
Following confirmed support, a move higher occurred that peaked at $28,660. 24-hour gains amounted to 5.3% at the time of press.