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Binance Possibly Faces The Next US Legal Challenges With Massive Impact On Crypto Market

Changpeng Zhao sued by CFTC
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The potential legal repercussions faced by Binance, the world’s largest crypto exchange, in the U.S. are under scrutiny. According to a CoinDesk report, the U.S. Department of Justice is considering fraud charges against the crypto giant. However, the potential impact on the broader crypto market is causing hesitation, with officials contemplating alternative actions such as fines or deferred/non-prosecution agreements.

The news of potential legal action led to an immediate drop in the value of Bitcoin (BTC) and Binance‘s own BNB token. Binance has declined to comment on these new US legal challenges.

Binance was already the target of a criminal probe in the U.S. for allegedly violating the country’s sanctions on Russia. The U.S. Securities and Exchange Commission (SEC) also filed a lawsuit in June for allegedly offering unregistered securities and operating illegally. In March, the Commodity Futures Trading Commission (CFTC) targeted the exchange and CEO Changpeng “CZ” Zhao for allegedly violating trading and derivatives regulations.

The potential fallout from the legal challenges against Binance in the US is a significant concern, given the impact of previous collapses in the crypto industry. The collapse of Sam Bankman-Fried‘s FTX last year wiped billions of dollars from crypto markets and pushed Genesis, a large lending business, into bankruptcy court.

U.S. authorities are currently being heavily criticized on social media for their harsh and perceived unfair treatment of crypto companies. The legal challenges could call into question the existence of the crypto market in the U.S. as a whole. The massive exodus of companies is expected, and with it, the loss of innovative power. In this respect, the concerns of the U.S. Department of Justice are very justified. Already today, many leading crypto companies are avoiding the U.S.

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