The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance, one of the world's largest cryptocurrency exchanges. The lawsuit alleges that Binance allowed US customers to trade derivatives without registering with the agency.
As news of the lawsuit spread, bears took control of the market and pushed Bitcoin below $27,000. The cryptocurrency market cap saw net outflows of $40 billion over the last 24 hours and currently stands at $1.12 trillion — down 3.42% from $1.16 trillion.
During the reporting period, Bitcoin and Ethereum's market cap fell by 4.25% and 2.75% to $516.82 billion and $210.35 billion respectively.
The impact was felt across all major cryptocurrencies except for XRP which remained stable during this period.
This development is a blow to investors who have been bullish on cryptocurrencies in recent months as they continue to gain mainstream acceptance as an asset class.
Binance has yet to respond publicly to the allegations made by CFTC but this lawsuit will undoubtedly have far-reaching implications for both Binance and other cryptocurrency exchanges operating in similar regulatory grey areas.
Investors are advised to exercise caution during these uncertain times in order to safeguard their investments from any potential risks that may arise due to regulatory changes or legal action against companies involved in cryptocurrency trading or related services.