• The CFTC and SEC have filed lawsuits against Binance for violating the Commodity Exchange Act (CEA) and US Securities Law, respectively.
• A survey of 1,273 crypto traders found that 45% believe there is a credible possibility of Binance’s collapse.
• To improve trust in the industry, crypto exchanges need to comply with regulators and practice transparency.
Regulators vs. Binance
The US commodity futures trading commission (CFTC) took legal action against Binance in March 2023 for violating the Commodity Exchange Act (CEA). This shook the crypto market, leading to a drop in Bitcoin’s (BTC) price from $27,700 to $26,600. Despite Binance and its CEO Changpeng Zhao’s (CZ) attempt to dismiss CFTC’s lawsuit, a survey taken in collaboration with BTC Peers involving 1,273 crypto traders internationally showed that 45% of them believe there’s a credible possibility of Binance’s collapse.
SEC’s Lawsuit Against Binance
On June 5th, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and CZ for violating securities law — claiming that they had allegedly requested customers to trade digital assets on unregistered platforms in the US. According to data provided by Santiment ,the social volume for the term “Binance collapse” skyrocketed on June 6 while Bitcoin’s price fell below the $26,000 mark. Since then however, heat around this issue has dropped significantly.
How To Improve Trust In Crypto Industry?
David Gokhshtein — founder of Gokhshtein Media — believes that “an essential consideration is the need for regulatory compliance in the crypto space.” To build long-term trust within this industry, crypto exchanges need to comply with regulators while taking transparency into account. After SEC’s lawsuit against them ,BinaceUS removed crypto-fiat trading pairs from their platform and encouraged investors to convert their US dollar holdings to stablecoins instead .
What Happens If Binance Collapses?
Despite all these hurdles faced by Biance , 55% of survey-takers voted for its market dominance despite high competition and tight regulatory scrutiny . If it fails address regulatory concerns ,improve security measures ,and maintain users’ trust – then it might lead to an eventual collapse .