Key Takeaways:
- Binance’s regulatory woes continue as U.S officials probe possible insider trading.
- Binance Coin (BNB) fell 11.7% between Sept 19 and Sept 20.
NEW DELHI (CoinChapter.com) — Binance’s troubles with regulators seems to be growing. U.S regulators are now reportedly investing world’s largest exchange for possible insider trading and market manipulation. The latest move highlights intensifying regulatory scrutiny against Binance.
U.S investigation involves the Commodity Futures Trading Commission (CFTC). Meanwhile, the U.S Justice Department (DOJ) and the Internal Revenue Service (IRS) are also investigating Binance on a separate issue. According to Bloomberg’s sources who wish to remain unnamed, the CFTC is trying to determine whether the company or its employees profited illegally.
Binance’s native token, Binance Coin, started the week at $408, but prices fell 10% between high ($410.25) to low ($368) levels before rebounding from immediate support. Moreover, the fall brought BNB’s prices below their 200-Day Moving Average line, making Binance Coin bearish in the long-term time horizon.
Binance’s Latest Brush With Regulators
The currently decentralized exchange recently announced it is looking to establish a centralized headquarter to ensure regulatory compliance. Binance runs a massive trading operation, which gives it access to millions of transactions. U.S authorities are looking into if the firm exploited that access.
Regulatory compliance has been a thorn in Binance’s side for some time now. Nations around the world launched investigations in the exchange’s workings claiming the firm lacks proper licenses. In addition, the U.S Justice Department and IRS are investigating if Binance is a medium of money laundering and tax evasion.
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Binance is not the only target of U.S authorities. The U.S government is worried about the rapid growth of crypto, believing the crypto market is prone to illegal activities. While Binance is not facing direct accusations, U.S agencies believe crypto firms disregard consumer interests when pursuing traditional financial services.
We have a zero-tolerance policy for insider trading and a strict ethical code related to any type of behavior that could have a negative impact on our customers or industry.
Binance in a statement
Binance does not have the license to operate in the U.S, which means Americans cannot trade derivatives on the exchange. As such, the CFTC requested internal Binance communications that could indicate the firm allowed U.S citizens to sign up.
Additionally, the CFTC is asking potential witnesses about the location of Binance’s servers. A possible reason behind this particular line of investigation might be jurisdictional issues and if the agency has any authority over Binance.
In a July blogpost, Changpeng Zhao, CEO of Binance, emphasized the firm’s policies to prevent insider trading. The Binance CEO further stated that the firm isolates the new token issuance unit from the rest of the exchange’s staff to protect against misconduct.
Price Charts
BNB had a bad start to the week, falling below previous support. As a result, the Binance token is now bearish across all time horizons, as prices are below BNB’s 50-Day (Red) and 200-Day (Yellow) Moving Average lines. The drop is BNB’s sharpest in the past two weeks.
Currently, BNB is holding above support at $363.5. If the support fails, Binance coin can crash to $345.8. If bulls fail to consolidate at this level, BNB prices can fall to $329.6 before recovering. On the other hand, the 26-Day (Blue) Exponential MA line has formed a resistance confluence with BNB’s 50-Day MA line.
As such, bulls would have to work harder to breach above the confluence resistance at $424.7. Once BNB breaks above immediate resistance, resistance at $442.85 would be the next target. Furthermore, resistance at $459 would cap any sustained uptrend.
Also Read: BNB tries to recover while Binance seeks to rebuild as a licensed financial institution.
Trend-based momentum oscillator MACD is also bearish for BNB. Bars on the MACD histogram are growing increasingly negative, highlighting that the MACD line (12-Day and 26-Day EMA difference) moves further below its signal line (9-Day EMA of MACD).
A downward-moving RSI trendline accompanies the downward movement of the MACD line. The relative strength index, a momentum oscillator that measures price movements, moves towards oversold regions. At present, the RSI is technically neutral at 35.24, but it is very close to the oversold boundary value of 30.
BNB was trading at $369 at the time of writing, down 9.72% on the day.
