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BNB, the native currency of the Binance ecosystem, remains under pressure as regulators continue questioning the exchange’s operations and compliance with local laws.
BNB Falls 10% From March 2023 High
After rising nearly 60% from December to March 2023, reaching as high as $345, BNB is down roughly 10% in the last trading day.
Binance, which is one of the popular cryptocurrency exchanges, is under pressure from regulators with agencies, mainly from the United States, questioning the ramp’s compliance with local laws. The effect on the crypto market has been visible but particularly pronounced on BNB, that’s currently lower and trailing other crypto assets, including Ethereum and Dogecoin.
CoinMarketCap data indicates that BNB is the third most valuable cryptocurrency when USDT, a stablecoin, is excluded. BNB has a market capitalization of $49.1 billion and is perched at 4th overall.
Despite regulatory headwinds, BNB is still above XRP, the currency behind the XRP Ledger (XRPL); and ADA, the native coin of Cardano, a smart contracts network. However, BNB trails Ethereum, which has a market cap of $224 billion at spot rates, when writing on April 6.
Regulators Are Questioning Binance
On March 27, the United States Commodity Futures Trading Commission (CFTC) officially sued Binance US, three related entities, and two of the exchange’s executives, including Changpeng Zhao, its CEO, for violating the country’s trading laws.
There could be causation between how BNB prices react and the exchange acting as a target for regulators. The CFTC says Binance is not fully compliant with applicable derivatives regulations and has failed to keep Americans from using the exchange. Moreover, the regulator cited private messages which appeared to show that Zhao and other executives knew that criminal groups use their exchange.
In response to the CFTC lawsuit, BNB fell roughly 6% from around $330 and has yet to recover from those levels. BNB has immediate support at about $300, a psychological reaction line.
Even so, the coin remains within a bullish formation defined by the expansion of prices from mid-March 2023. Based on the BNB candlestick arrangement in the daily chart, the uptrend may resume if prices rally above $350.
Besides the CFTC, other regulators are taking action against the exchange. On April 6, the Australian Securities and Investments Commission (ASIC) canceled Binance Australia Derivatives’ license at the exchange’s request.
The exchange has been ordered to close all its client’s open derivatives positions by April 21. This comes less than a week after the Australian regulator considered whether they should cancel or suspend Binance’s license.
Dubai’s Virtual Assets Regulatory Authority (VARA) also requested additional information from entities applying for crypto licenses. VARA wants Binance to submit, among other details, ownership structure, and audit procedures.
