CFTC Vs. Binance: Cumberland Outlines 3 Scenarios For Bitcoin And Crypto

0 2

The lawsuit filed by the Commodity Futures Trading Commission (CFTC) against Binance and its CEO Changpeng Zhao (CZ) rattled the crypto market yesterday, causing the Bitcoin price to drop by $1,300 and 5% at times. At press time, BTC was stabilizing around the $27,000 mark, yet the outcome of the Binance trial could be a key driver of price trend in the medium term.

The accusations against Binance weigh heavily. Among other things, the CFTC accuses the world’s largest crypto exchange of trading on its own platform with 300 accounts directly or indirectly (owned by CZ), supporting money laundering and intentionally circumventing US law.

Cumberland Sees 3 Scenarios For CFTC Vs. Binance

On Twitter, Cumberland, a specialized crypto asset trading company within DRW Holdings, opinions that the Binance lawsuit is now a major driver of Bitcoin price performance and the overall crypto market. In addition, Cumberland presents three scenarios of how the trial could end and what the consequences could be for Bitcoin and the entire crypto market.

The outcome is likely going to fall into one of these three scenarios: (1) Clearer guardrails, but no material penalty (i.e. they win the case scenario); (2) Clearer guardrails, but a manageable penalty; (3) Clearer guardrails, but significant penalties.

According to Cumberland, the way to get there is likely to be through a short-term settlement or else a lengthy, multi-year legal odyssey that only then leads to a settlement or court decision. For cryptocurrencies more broadly, scenario number one is clearly bullish, while a lengthy case like Ripple’s against the SEC would be bearish.

“But since the path for any of these in the near term is still unclear, near-term price action and volatility are similarly uncertain,” writes Cumberland, which continues to forecast that the litigation will further exacerbate cryptocurrencies’ already strained relationship with the US banking system.

As a side effect, the already thin liquidity in the Bitcoin and crypto markets could also be further hampered. As NewsBTC reported, Bitcoin liquidity has fallen to a 10-month low as market makers lost access to USD payment rails.

According to the asset manager, it is worth looking at the CFTC’s case against BitMEX and its founder. In August 2021, a federal court ordered BitMEX to pay $100 million for illegally operating a cryptocurrency trading platform and money laundering violations.

Arthur Hayes, Benjamin Delo, and Samuel Reed were ordered to pay civil fines totaling $30 million. They were also barred from committing further violations of the Commodity Exchange Act (CEA) and CFTC regulations.

As per Cumberland the industry “emerged from that tumult with clearer guidelines, increased exchange reliability, and the consequent investor confidence to send the price of BTC +700%,” adding:

The same seems likely to play out with Binance, albeit on a slower timeframe. At the expense of an increase in short term volatility, confidence-bolstering regulation and fairer industry standards should be the long term result.

One indication of the regulatory clarity to come is the CFTC’s finding that “BTC, ETH, LTC and at least two fiat-backed stablecoins” are commodities.

Bitcoin And Crypto Ahead Of A Regime Change

Just a week ago, Cumberland wrote that crypto is facing a “regime change in the market” due to the BTFP (Bank Term Funding Program) and the Federal Reserve’s expansion of swap operations with five other central banks.

“The flow we are seeing on the OTC desk is reflecting the new reality. It has been extremely focused in BTC and ETH, and we’re seeing very little profit-taking, despite the fact that BTC is up 70% on the year; our flow ratio right now shows roughly twice as many buyers as sellers,” Cumberland wrote via Twitter.

At press time, the Bitcoin price stood at $26,966, still digesting the Binance news from yesterday.

Bitcoin BTC price

knife

Leave A Reply

Your email address will not be published.

bitcoin
Bitcoin (BTC) $ 27,228.30
ethereum
Ethereum (ETH) $ 1,905.12
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 307.41
usd-coin
USD Coin (USDC) $ 0.99982
xrp
XRP (XRP) $ 0.524534
staked-ether
Lido Staked Ether (STETH) $ 1,903.44
cardano
Cardano (ADA) $ 0.378745
dogecoin
Dogecoin (DOGE) $ 0.072725
solana
Solana (SOL) $ 21.31
matic-network
Polygon (MATIC) $ 0.899051
tron
TRON (TRX) $ 0.081917
litecoin
Litecoin (LTC) $ 95.30
polkadot
Polkadot (DOT) $ 5.29
binance-usd
Binance USD (BUSD) $ 0.999999
shiba-inu
Shiba Inu (SHIB) $ 0.000009
avalanche-2
Avalanche (AVAX) $ 14.47
dai
Dai (DAI) $ 1.00
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 27,257.30
uniswap
Uniswap (UNI) $ 5.07
leo-token
LEO Token (LEO) $ 3.60
chainlink
Chainlink (LINK) $ 6.44
cosmos
Cosmos Hub (ATOM) $ 10.61
okb
OKB (OKB) $ 46.45
monero
Monero (XMR) $ 145.92
the-open-network
Toncoin (TON) $ 1.75
ethereum-classic
Ethereum Classic (ETC) $ 18.16
stellar
Stellar (XLM) $ 0.0923
bitcoin-cash
Bitcoin Cash (BCH) $ 114.82
filecoin
Filecoin (FIL) $ 4.99
internet-computer
Internet Computer (ICP) $ 4.81
true-usd
TrueUSD (TUSD) $ 0.999765
lido-dao
Lido DAO (LDO) $ 2.31
aptos
Aptos (APT) $ 8.97
quant-network
Quant (QNT) $ 119.37
hedera-hashgraph
Hedera (HBAR) $ 0.050722
arbitrum
Arbitrum (ARB) $ 1.24
crypto-com-chain
Cronos (CRO) $ 0.059498
near
NEAR Protocol (NEAR) $ 1.63
vechain
VeChain (VET) $ 0.019868
the-graph
The Graph (GRT) $ 0.130736
apecoin
ApeCoin (APE) $ 3.15
algorand
Algorand (ALGO) $ 0.152247
the-sandbox
The Sandbox (SAND) $ 0.574681
paxos-standard
Pax Dollar (USDP) $ 0.998751
frax
Frax (FRAX) $ 1.00
edgecoin-2
Edgecoin (EDGT) $ 1.00
eos
EOS (EOS) $ 0.903692
elrond-erd-2
MultiversX (EGLD) $ 37.60
rocket-pool
Rocket Pool (RPL) $ 49.14
render-token
Render (RNDR) $ 2.58
optimism
Optimism (OP) $ 1.45
aave
Aave (AAVE) $ 63.75
fantom
Fantom (FTM) $ 0.323008
decentraland
Decentraland (MANA) $ 0.486365
blockstack
Stacks (STX) $ 0.616201
theta-token
Theta Network (THETA) $ 0.848035
tezos
Tezos (XTZ) $ 0.906729
rocket-pool-eth
Rocket Pool ETH (RETH) $ 2,046.61
axie-infinity
Axie Infinity (AXS) $ 7.12
immutable-x
ImmutableX (IMX) $ 0.806122
havven
Synthetix Network (SNX) $ 2.39
flow
Flow (FLOW) $ 0.72808
usdd
USDD (USDD) $ 0.999731
radix
Radix (XRD) $ 0.072396
bitdao
BitDAO (BIT) $ 0.501028
gala
GALA (GALA) $ 0.03025
neo
NEO (NEO) $ 10.26
kucoin-shares
KuCoin (KCS) $ 7.41
whitebit
WhiteBIT Token (WBT) $ 4.91
curve-dao-token
Curve DAO (CRV) $ 0.855575
bitget-token
Bitget Token (BGB) $ 0.470846
bitcoin-sv
Bitcoin SV (BSV) $ 32.89
injective-protocol
Injective (INJ) $ 7.88
gatechain-token
Gate (GT) $ 4.41
maker
Maker (MKR) $ 665.99
conflux-token
Conflux (CFX) $ 0.286478
klay-token
Klaytn (KLAY) $ 0.186186
gemini-dollar
Gemini Dollar (GUSD) $ 1.00
bittorrent
BitTorrent (BTT) $ 0.00000058925788
kava
Kava (KAVA) $ 1.01
iota
IOTA (MIOTA) $ 0.198564
chiliz
Chiliz (CHZ) $ 0.100949
pepe
Pepe (PEPE) $ 0.000001
pax-gold
PAX Gold (PAXG) $ 1,958.93
casper-network
Casper Network (CSPR) $ 0.046769
tokenize-xchange
Tokenize Xchange (TKX) $ 6.36
sui
Sui (SUI) $ 0.946883
xdce-crowd-sale
XDC Network (XDC) $ 0.035995
terra-luna
Terra Luna Classic (LUNC) $ 0.000085
compound-ether
cETH (CETH) $ 38.28
mina-protocol
Mina Protocol (MINA) $ 0.545278
gmx
GMX (GMX) $ 56.14
huobi-token
Huobi (HT) $ 3.00
dash
Dash (DASH) $ 42.78
tether-gold
Tether Gold (XAUT) $ 1,958.48
ecash
eCash (XEC) $ 0.000025
frax-share
Frax Share (FXS) $ 6.63
trust-wallet-token
Trust Wallet (TWT) $ 1.08
frax-ether
Frax Ether (FRXETH) $ 1,903.02