Yes, that’s right. The Binance coin price has taken a hit today. You say hit, I say spanked.
The Binance coin fell as a result of civil enforcement action that Binance is facing from the CFTC (Commodity Futures Trading Commission) in the USA. Investors and traders are fretting about the likely impact of the CFTC action, which caused the Binance coin to fall from around $329 on March 27th, 2023, to a low of $307 within 24 hours. The drop of almost 7% might well worry investors.
Binance, a Chinese-owned cryptocurrency exchange, is accused of allowing their US customers to illegally carry out derivatives transactions, a charge that Binance denies. If found guilty, Binance could face sanctions and/or heavy fines.
The CFTC’s enforcement action against Binance comes within a week of the Chinese-owned social media phenomenon Tik-Tok facing a congressional hearing in the USA amid accusations of potentially spying on behalf of the Chinese government.
Changpeng Zhao, a Chinese-Canadian entrepreneur, founded Binance in China in 2017. Initially headquartered in Shanghai, Binance relocated to Malta after the Chinese government announced a crackdown on cryptocurrency trading in September 2017. Despite its move to Malta, Binance still maintains strong ties to China.
Binance launched a new platform called “Binance China” in 2019 that provides cryptocurrency trading services to users in China. However, Binance China is operated by a separate entity, called “Binance Asia Services,” based in Taiwan.
Binance is known to engage with the Chinese market through various initiatives, such as partnering with the Chinese government-affiliated China Blockchain Application Center and conducting blockchain research and development in China. Binance’s CEO, Changpeng Zhao, regularly speaks at blockchain and cryptocurrency events in China.
It’s worth noting that while Binance has a strong presence in China, the Chinese government has been cracking down on cryptocurrency-related activities in recent years, including banning cryptocurrency exchanges and mining operations. As a result, Binance has continued to expand its operations globally, with offices in various countries, including the United States, Singapore, and Japan.
Important note: Any comments reported here do not constitute financial advice and are opinions only. Always seek independent financial advice before investing, and never trade or invest with money you cannot afford to lose.