Binance faces US ban for ‘breaking laws', Bitcoin falls

Bitcoin dipped below the $27,000 mark after news emerged that Binance, the world’s largest cryptocurrency exchange, is facing a US ban alleging the firm has been operating in the country illegally.

The Chinese company is being sued by the Commodity Future Trading Commission (CFTC), which could also lead to a possible trading and registration ban in the US.

Bitcoin fell 3.4 per cent after the CTFC announcement, which stated: "The Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the US District Court for the Northern District of Illinois charging Changpeng Zhao and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act and CFTC regulations."

Changpeng “CZ” Zhao is the CEO of Binance, and the CFTC has accused him of encouraging Americans to “evade compliance controls” and breaking US law.

The Binance cryptocurrency exchange has also been accused of failing to properly register with the CFTC.

The impact of the CTFC investigation into Binance has added to already cautious investor sentiment pervading crypto markets, as traders await the outcome of the SEC's notice to Coinbase (COIN).

Bitcoin was down 3.4 per cent to $26,935 on Monday.

Ethereum (ETH-USD) fell 3 per cent to $1,712.

The annoucnement by the CTFC also contained a statement by CFTC chairman Rostin Behnam, who said: “Today’s enforcement action demonstrates that there is no location, or claimed lack of location, that will prevent the CFTC from protecting American investors.

"I have been clear that the CFTC will continue to use all of its authority to find and stop misconduct in the volatile and risky digital asset market.

“For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance.

"This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of U.S. law. I applaud the diligent and dedicated work of the CFTC’s Enforcement team in bringing this action, and for their hard work in addressing illegal operations in the digital asset space.”

After the news, the global cryptocurrency market cap was at $1.17tn, a fall of 2.8 per cent, according to Coingecko data.