The price of Binance Coin (BNB) has fallen by 5% in the past 24 hours, dropping to $310 in response to the news that the CFTC has filed a civil enforcement action against Binance and its CEO Changpeng Zhao.
At $310, BNB has also dropped by 7.5% in the past week, although the exchange token is up by 2.5% in the last 30 days, as well as up by 26% since the start of the year.
The CFTC has leveled some serious charges against Binance, including claims that the exchange enabled derivatives transactions for US customers without registering with the CFTC, as well as allegations that it failed to require its customers to verify their IDs before trading on the platform.
The CFTC is seeking some steep penalties for Binance, including “permanent trading and registration bans,” yet the exchange has responded vigorously to the regulator’s charges, meaning it’s hardly a foregone conclusion that it faces an existential threat.
Binance Coin Price Prediction as CFTC Sues Binance – Is This the End of Binance Crypto Exchange
BNB’s chart suggests that it could be in store for some further gains, with its relative strength index (purple) dropping from 70 a few days to under 50 today.
This implies that further falls are possible before BNB becomes oversold, an impression reinforced by the fact that the token’s 30-day moving average (red) is still due to fall below its 200-day average (blue).
In other words, BNB’s current slide won’t bottom until the 30-day drops significantly below its 200-day, something which may not happen for a week or so.
As such, the market could see BNB’s price fall below $300 in the near future, with the coin as low as $275 as recently as March 11.
Taking the CFTC’s charges at face value, things could get much worse for Binance and its BNB coin, given the extent of the allegations.
These claims include the following:
- Binance has instructed its employees and customers to evade CFTC compliance controls
- The exchange intentionally structured its business to avoid US registration requirements, despite seeking and serving US-based customers
- Zhao operated approximately 300 separate Binance accounts that have engaged in insider trading activity on the Binance trading platform
This last claim is particularly damning (if true), with many people within crypto already criticizing the exchange harshly for it.
In fact, such is the serious nature of the charges that numerous commentators working within the industry now seem to think that the regulator has a chance of doing real damage to Binance’s business.
On the other hand, Binance has begun standing its ground in response to the CFTC’s action, with Zhao already penning a blog that denies the regulators charges.
However, if the CFTC wins its case, it’s possible that Binance could face an existential threat to its business, as well as some very big financial penalties.
If so, then BNB is likely to fall much further than its current price, although things remain at a very early stage, so it would be rash to make a strong bet in either direction.
And even if BNB is in for a bumpy ride, the same may end up applying to the market, as evidenced by the SEC issuing a Wells notice against Coinbase.
It seems that US regulators have decided to come out in force against much of the industry, something which could end up having negative ramifications for prices across the entire market.
But as with Binance (perhaps even more so), Coinbase has come out strongly against the SEC’s claims against it, so only time will tell.
Is Now a Good Time to Buy BNB?
Given the opening of legal action against Binance, now is most likely not the time to buy BNB, which may be in for more falls in the coming days and weeks.
For this reason, traders looking for big gains may prefer to look at other coins at the moment, with plenty of high-potential tokens currently showing promise.
To this end, the Cryptonews Industry Talk team has assembled a selection of the top 15 cryptocurrencies to keep an eye on in 2023.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.
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