Bittrex news: U.S. Treasury fined Bittrex exchange $53 million
Bittrex news. The U.S. Treasury Department and the Financial Crimes Enforcement Network fined the cryptocurrency exchange Bittrex for $24 million and $29 million, respectively. The department announced this in a press release.
The fine was in response to Bittrex exchange’s violations of its anti-money laundering requirements, the U.S. Treasury Department said. U.S. Treasury Department investigations found numerous violations of sanctions requirements, bank secrecy, anti-money laundering, and suspicious activity reporting laws.
U.S. authorities allege that Bittrex exchange was effectively giving sanctioned regions, darknets and other malicious actors access to the market, resulting in risks to trading counterparties. The regulator estimates that users from sanctioned regions could trade for more than $263.4 million using Bittrex between 2014 and 2017. At the same time, the exchange was aware of such cases with the help of IP-address monitoring.
Bittrex has previously been accused of taking large amounts of bitcoin to unknown destinations. Back in 2019, the Twitter account Whale Alert recorded 17 nearly simultaneous bitcoin transactions to unknown wallets, each worth about 56,000 BTC. The reason for transferring such large amounts of bitcoin is still unknown.
In March 2022, U.S. Deputy Treasury Secretary Wally Adeyemo threatened companies that would help the Russian Federation circumvent sanctions. At the time, the U.S. Treasury Department did not notice any significant episodes of sanctions circumvention, but is confident that the Russian Federation will try to do so “by any means possible. At the same time, Adeyemo suggested that opaque offshore companies and crypto-assets could be the most likely such tools.
Earlier, we reported that Binance and venture capital funds still want to take over Twitter.
Users withdrew $1.6 billion from Binance after CFTC lawsuit
According to Nansen, investors have withdrawn over $1.6 billion from Binance since the Commodity Futures Trading Commission (CTFC) lawsuit was filed. In the last 24 hours, the exchange’s balance has dipped by $134.8 million – it seems that some of that money has been transferred to Bitstamp, Gemini and Bitfinex.
But worry not yet: after the FTX collapse that shook the crypto market in November 2022, Binance successfully survived a much more serious cash outflow. More than $12 billion was withdrawn from the exchange in 2 months, while the maximum withdrawal exceeded $3 billion a day.
At the moment, the exchange’s balance sheet makes over $64 billion, with USDT, Bitcoin (BTC), Ethereum (ETH), and BNB making up over 75% of all Binance’s reserves.
Regulators continue the hunt for Binance and CZ
Binance Holdings Ltd. and Changpeng Zhao (CZ) were sued by the U.S. Commodity Futures Trading Commission (CFTC) on Monday for allegedly violating derivatives trading rules. The regulator alleges that the exchange evaded its obligations by failing to register properly and that some of the assets traded on the platform – Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) fall under the category of commodities.
Other authorities are also investigating Binance. The Internal Revenue Service and federal prosecutors are checking the company’s compliance with anti-money laundering regulations, while the Securities and Exchange Commission is checking whether it offered users trading in unregistered securities.
Changpeng Zhao called the lawsuit an “unexpected and disappointing civil complaint” and said it contained an incomplete statement of facts.
Earlier we reported on why bitcoin fell.
Why Bitcoin fell?
Bitcoin fell amid news that the U.S. Commodity Futures Trading Commission (CFTC) has sued major cryptocurrency exchange Binance and its founder, entrepreneur Changpeng Zhao. The regulator accuses the company of violating derivatives trading rules and evading obligations related to asset registration.
The document also says that Zhao may have conducted covert trading “against the market.” He had about 300 accounts at his disposal to do so, according to the prosecution.
At the time, bitcoin lost more than 5% of its value. According to CoinMarketCap, BTC then renewed its local low at $26,606. Now, the coin has been corrected to $26,935.
Changpeng Zhao disagrees with the regulator’s accusations. In his opinion, the CFTC’s lawsuit does not provide complete information about Binance’s business. The entrepreneur noted that he and his team have been cooperating with the regulator for the past two years. Therefore, the CFTC claims were an unpleasant surprise to him.
The problematic Binance
This is not the first time Binance has faced claims from regulators. The trading platform has been in their crosshairs for several years. The situation escalated in late 2022 – amid the collapse of the FTX cryptocurrency. During this period, it was reported online that the U.S. Justice Department was preparing to charge Binance and Changpeng Zhao with money laundering. Users of the crypto exchange reacted to the news by actively withdrawing funds.
The next blow was Binance’s auditor’s rejection of the results of the analysis of the trading platform’s assets. The decision had a negative impact on the reputation of the exchange. The fact is that amid the collapse of FTX trading platforms began to prove to users the existence of reserves to remove doubts about their security. A key link in the practice was the verification of assets by a renowned auditor.
In February 2023, Binance experienced another shock – the stoppage of the issue of its stablecoin Binance USD (BUSD) by Paxos. The reason for this decision was that the U.S. Securities and Exchange Commission (SEC) saw signs of securities in the asset.
What will happen to BTC next: bitcoin forecast
Many members of the crypto community believe that amid the pressure faced by Binance, bitcoin may continue to decline. For example, crypto-enthusiast Mark Cullen suggested that a negative news background will take BTC to levels below $25k.
At the same time, some representatives of the crypto-industry do not see the realized bitcoin fall as a reason for further decline. For example, popular in the cryptocurrency community analyst @Nebraskangooner believes that regulatory pressure on Binance has not brought any significant changes.
Earlier, we reported that bitcoin trading on Binance collapsed after fees were refunded.
Bitcoin trading on Binance collapsed after the return of commissions
Bitcoin trading volume in BTC/USDT on Binance fell by 90% as spot trading commissions were returned. This was the conclusion reached by Kaiko analysts who studied trading activity on the site.
According to the researchers, free trading pairs accounted for over 65% of all trading on Binance by mid-March. Demand for commission-free spot trading in bitcoin pairs was so high that Binance increased its market share among competitors by 20% during the action. However, the return of commissions almost immediately affected the trading floor’s position: in just one week, Binance lost 10% of its market share.
Meanwhile, the media revealed that up to $400 million worth of ERC-20-based tokens have been withdrawn from Binance in the last 24 hours. Also, Paxos, the ERC-20-based stablecoin Binance USD (BUSD) issuer, has burned over $155 million in BUSD in just a couple of hours.
The latest round of client activity may be related to a lawsuit against Binance by U.S. regulators. The U.S. Commodity Futures Trading Commission (CFTC) has sued Binance and its founder Changpeng Zhao for violating local laws. According to the regulator, the exchange offered derivatives trading to U.S. citizens starting in July 2019 without permission from the authorities. Moreover, the site informed VIP customers of best practices to evade activity controls and conceal “true coverage and transactions,” the CFTC noted.
Zhao responded by saying he disagreed with the charges because the lawsuit misrepresented the facts about the exchange’s activities. He assured that the exchange has developed “best-in-class technology” for compliance.
We previously reported that Bitcoin onchain metrics are stronger than ever.
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