Binance Coin’s (BNB) price plunged by 9.7% on Monday, June 6, after the U.S. Justice Department filed a lawsuit against the world’s largest cryptocurrency exchange.
The lawsuit alleges that Binance violated U.S. anti-money laundering laws by failing to implement adequate customer identification procedures and by allowing U.S. persons to trade on its platform.
The news of the lawsuit sent shockwaves through the crypto markets, with Bitcoin (BTC) and Ethereum (ETH) both falling by more than 5%.
BNB’s price decline was particularly severe, as it has been seen as a safe haven asset in the past. The token’s price has now fallen by more than 70% from its all-time high of $690, which it reached in May 2021.
The lawsuit against Binance is the latest in a series of setbacks for the exchange. In May, Binance was ordered to shut down its operations in the United Kingdom. The exchange has also been facing regulatory scrutiny in other jurisdictions, including Japan, Germany, and the Cayman Islands.
The news of the lawsuit and the subsequent sell-off in BNB has raised concerns about the future of the exchange. However, Binance CEO Changpeng Zhao has said that the exchange is “committed to cooperating with the investigation” and that it “will continue to operate as normal.”
It remains to be seen how the lawsuit will impact Binance in the long term. However, the news has certainly shaken the confidence of investors in the exchange.
In addition to the lawsuit, Binance has also been facing a significant outflow of Bitcoin from its reserves. According to data from CryptoQuant, the exchange’s Bitcoin reserves have fallen by more than 100,000 BTC since the beginning of the year.
The outflow of Bitcoin from Binance is likely due to a number of factors, including the lawsuit, the regulatory scrutiny, and the general sell-off in the crypto markets.
The decline in Binance’s Bitcoin reserves is a sign that investors are losing confidence in the exchange. It remains to be seen how long this trend will continue.
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