The Commodity Futures Trading Commission sent prices of crypto-related stocks and the most popular cryptocurrencies plummeting on Monday after announcing it was suing Binance and its CEO, Changpeng “CZ” Zhao, in federal court.
Bitcoin And Ether, the two major cryptocurrencies, are down around 3% each in the past 24 hours, a change from the steady rise seen in recent days that saw each hit a multi-month high. The BNB cryptocurrency, which powers Binance’s BNB chain, fell more than 6%.
Many crypto-related stocks fell further.
Shares of competing crypto exchange Coinbase fell just over 10% after the news. The company recently ran into its own regulatory issues, with the Securities and Exchange Commission issuance of a well notice to the exchange related to “aspects of the company’s exchange, our Coinbase Earn staking service, and Coinbase Wallet after a cursory investigation,” Coinbase said last week.
Shares of MicroStrategy, the Bitcoin hodling company founded by Michael Saylor, also fell more than 7% on Monday afternoon. In a tweet on Monday, Saylor said the company repaid a $205 million loan to collapsed crypto bank Silvergate at a 22% discount. Saylor added that the company spent around $150 million for an additional 6,455 Bitcoin tokens to bring its total holdings to 138,955, worth around $3.7 billion at current prices.
MicroStrategy repaid its $205 million Silvergate loan at a 22% discount. Since 03/23/23, $MSTR acquired ~6,455 additional bitcoins for ~$150 million at an average of ~$23,238 per #bitcoin & held ~138,955 BTC acquired for ~$4.14 billion at an average of ~$29,817 per bitcoin. https://t.co/ALp9VLkTpt
— Michael Saylor⚡️ (@saylor) March 27, 2023
Share prices of mining companies also fell. Marathon Digital Holdings fell more than 8%, while Colorado-based Riot Blockchain saw its shares drop around 8%. Toronto-based crypto miner Hut 8 was down 6%.
The CFTC alleged in a 74-page complaint Monday that the company “failed to comply with applicable federal laws while favoring Binance’s U.S. customer base…” The agency alleges in the lawsuit that Binance failed to implement proper procedures know-your-customer and anti-money laundering, and helped US-based customers “evade the compliance controls Binance claims to have in place to prevent and detect violations of US law.”
In a monday tweetZhao posted a message just with the number “4”, which he said meant ignoring FUD, a popular Crypto Twitter acronym for Fear, Uncertainty and Doubt.