- Cayman Islands Monetary Authority announced a regulatory crackdown on Binance, the largest cryptocurrency exchange by volume.
- The exchange is facing regulatory backlashes at a global level.
- Binance Coin (BNB), Binance’s native token, may end up facing the repercussions of the scrutiny.
NEW DELHI (CoinChapter.com) — Binance, the world’s largest cryptocurrency exchange by volume, is under fire from different regulatory authorities. Adding to the company’s woes, the Cayman Islands Monetary Authority (CIMA) announced Binance does not have the required approvals for operating from or within the islands. As a result, or so it appears, the exchange’s native token, Binance Coin (BNB), declined by 8.73% from July 1’s high of $304.866.
Binance’s Regulatory Issues
In its announcement, CIMA stated that Binance and its entities do not have any affiliation with the regulatory body. Moreover, the regulatory body is also investigating if Binance or any of its affiliated companies have “any activities operating in or from within the Cayman Islands which may fall within the scope of the Authority’s regulatory oversight.“
CIMA also emphasized that companies operating a crypto exchange business in its jurisdiction must register themselves under the Virtual Asset (Service Providers) Act (VASPA), 2020. Or, it must be an existing company, waived by CIMA under VASPA.
Binance repudiated CIMA’s claims, saying that Binance.com operates in a decentralized manner. As such, it ‘does not run a cryptocurrency exchange out of the Cayman Islands,’ said a company spokesperson. Media reports about the same were claimed to be ‘misreported.’
Binance is also having trouble with Thailand’s Securities and Exchange Commission. The Thai SEC stated it had filed a criminal complaint against the crypto exchange. In addition, the Economic Crime Suppression Division of the country will investigate Binance for operating a virtual asset business without a license. According to the authorities, the crypto exchange provided services through its website by matching orders or arranging counterparties.
Moreover, the Thai authorities also pointed out that they issued a warning to Binance on April 5, but the firm failed to respond within time.
However, this is not a new development for Binance. The firm has been facing regulatory ire across the globe for some time now. Founded in China, Binance moved out after China’s crypto-trading ban arrived in 2017. As a matter of fact, The Thai and Cayman regulators are a new addition to a long list of governments closely scrutinizing the exchange’s operations.
BNB Paying The Price
Binance’s in-house token, Binance Coin (BNB), took a hit when the Thai SEC and CIMA developments began circulating. Although BNB prices were consolidating earlier, it now looks like bullish winds are slowly leaving the token’s sails.
The token has been trading below the 50-Day Moving Average (Yellow) line and the 100-Day Moving Average (Blue) line since the May 19 crash, indicating a bearish outlook in short and medium-term. However, the 200-Day Moving Average (Green) line was well below the price level. The moving averages are trend indicators, and as such, the token’s long-term trend kept the bulls hopeful of its future.
Recently, BNB prices have been testing the 200-Day MA line as support, rebounding from the $279 level. However, further decline is possible once the support level is breached. Moreover, the decreasing volumes indicate a loss of investor interest.
The relative strength index, or RSI, is a trend oscillator that helps identify overbought or oversold assets. RSI of the token shows a falling trend, an early indicator of possible trend reversal downwards. It currently has a value of 39.27 on the daily chart.
Resistance for the Binance token is at the $300 mark. Moreover, if the bulls manage to breach and hold this resistance, the next breakout will be at the $310 price level.
At the time of writing, BNB was trading at $281.31
The global crackdown on crypto trading is worrisome as authorities seek to bring crypto trading under their regulatory guidelines. With yet another regulatory body opening an investigation into Binance and its operations, a storm might be on the horizon for the crypto exchange.