Binance likely to settle CFTC lawsuit, could be forced to cease US operations - Bernstein

The legal tussle between Binance, the world's biggest cryptocurrency exchange, and the Commodity Futures Trading Commission will likely result in a settlement, which would be bullish for the industry. Bernstein thinks the CFTC could force Binance to cease operations in the U.S. Note that Binance.US accounts for only a small part ( Chhugani believes Binance might work towards a fine and settlement to avoid a protracted legal battle. Some allegations may be hard to prove, he said, such as those related to U.S citizens trading derivatives, as many U.S.-based trading firms have foreign units participating in global offshore crypto markets. "... given the global nature of these markets, it would be challenging to pin the blame completely on Binance." Bernstein said it can't comment the insider trading claims, but these are civil allegations, which would be extremely hard to prove for the CFTC. "We don't see this as material to crypto markets and don't expect a large selloff, since the regulatory narrative seems to have pivoted from the U.S to expected Hong Kong/China flows, with Hong Kong's retail crypto market expected to open on June 1," Chhugani concluded. Meanwhile, DRW's crypto trading company Cumberland believes a near-term settlement would be bullish for broader crypto. "This lawsuit will certainly exacerbate tightness in the already-strained digital asset banking system, and as a knock-on effect, it will damage liquidity," it said . "At the expense of an increase in short-term volatility, confidence-bolstering regulation and fairer industry standards should be the long term result: the CFTC specifying that 'BTC, ETH, LTC, and at least two fiat-backed stablecoins' are commodities is an early indication of the clarity to come." More on Crypto Clampdown Binance, CEO Changpeng Zhao sued by CFTC over regulatory breaches Binance, Binance.US more intertwined than they disclosed Senators call on Binance to disclose finances, claim it evaded regulators