Cryptocurrencies dip as investors digest regulatory updates from Binance, Kraken

Cryptocurrencies dip as investors digest regulatory updates from Binance, Kraken

and CEO of Changpeng Zhao, commonly known as “CZ”, attends the “CZ meets Italy” at Palazzo Brancaccio on May 10, 2022 in Rome, Italy.

Antonio Masiello | Getty Images

Cryptocurrencies were slightly lower Tuesday, as weighed a batch of from Washington involving some of the biggest names in crypto: Binance, Kraken and Tether.

Binance Coin slid 6% after the U.S. Department of Justice has brought criminal charges against Binance and its founder and CEO, Changpeng Zhao, also known as “CZ.” Earlier in the day the coin rose as much as 5% with hopeful investors eager to see the multi-year investigation into the world's largest crypto exchange resolved.

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The move weighed on the rest of the crypto market. Ripple's XRP fell 4%, Solana was down by more than 6%. Polygon and Uniswap lost 9% and 6%, respectively. Meanwhile, bitcoin was off its lows but down by 1.66%, hovering just below $37,000. Ether was last lower by about 3% at $1,976.13.

“The digital asset market has been under substantial systemic pressure ever since the SEC initiated significant actions against Binance in March of this year, with the ongoing scrutiny of CZ being an expected development,” said James Butterfill, head of research at CoinShares. “Nevertheless, the impact of this on the broader market is diminishing as Binance's contribution to global trade volumes has sharply fallen from 85% at the start of the year to merely 30% now.”

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He added that the decrease in Binance's influence is parallel by the stability of bitcoin prices.

Also on Monday evening, the Securities and Exchange Commission alleged that crypto exchange Kraken has been operating as an unregistered broker, clearing agency and dealer and that it commingled customers' crypto assets with its own. This is the second time this year the SEC has sued Kraken. In February the agency said Kraken failed to register the offer and sale of the crypto asset staking-as-a-service program.

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Meanwhile, the DOJ on Tuesday commended Tether, the controversial operator of the biggest stablecoin in the crypto ecosystem, for its efforts in freezing $225 million of assets linked to a human trafficking syndicate in Southeast Asia.

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