Crypto Mining Stocks Plunge Following CFTC Lawsuit Against Binance

  • Sergey Maga
  • 16:08 Mar 28, 2023
Crypto Mining Stocks Plunge Following CFTC Lawsuit Against Binance

Crypto-related stocks experienced a sharp decline on Monday after the U.S. Commodity and Futures Trade Commission (CFTC) filed a lawsuit against Binance, the world’s largest cryptocurrency exchange by trading volume, and its CEO, Changpeng Zhao.

Coinbase (COIN), the only U.S. publicly traded crypto exchange, saw its shares drop by 9.1%. Meanwhile, shares of bitcoin mining companies Marathon Digital (MARA), Riot Blockchain (RIOT), and Hut 8 Mining (HUT) all fell by more than 7%. MicroStrategy (MSTR), which had disclosed the purchase of nearly 6,500 bitcoins earlier on Monday, experienced a 6.7% decrease in its stock value.

The largest cryptocurrency by market cap, Bitcoin, also suffered a loss of $1,000, dropping below $27,000. Binance’s exchange token, BNB, fell 3.3% following the news.

The CFTC’s lawsuit, filed in the U.S. District Court for the Northern District of Illinois, accuses Binance of knowingly offering unregistered crypto derivatives products in the U.S., which is against federal law. The suit claims that Binance operated a derivatives trading operation in the country, offering trades for numerous cryptocurrencies that the CFTC considers commodities. The lawsuit also alleges that, under Zhao’s leadership, Binance instructed its employees to spoof their locations using virtual private networks.

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