Bitcoin Drops on Report US Prosecutors Are Considering Fraud Charges Against Binance

Bitcoin dropped after Semafor reported that the US Department of Justice (DoJ) is considering fraud charges against Binance.

But federal prosecutors are worried that an indictment of the world’s biggest crypto exchange may cause panic in the crypto market, triggering a run similar to the one that led to  FTX’s demise and losses for US consumers, the story said, citing people familiar with the matter. The DoJ declined to comment, it added.

Because of their concerns about the impact of potential charges, prosecutors are considering alternatives that include “fines and deferred or non-prosecution agreements,” the story said.

Bitcoin Fell, Then Pared Losses

Bitcoin fell a little more than 1% on the news to $28,995, but quickly pared losses. It traded down 0.5% from its level before the news broke.

Bitcoin’s muted reaction was mirrored by reaction to the story on the X social media platform, previously Twitter, as commentators reacted with scepticism to the story.

“This looks like nothing new,’’ tweeted CrediBULL Crypto. “We already knew that these talks were happening in the background. This literally doesn’t give us any new information or cite any sources.’’

"according to people familiar with the matter"
"the people said"
"the DOJ declined to comment"

This looks like nothing new. We already knew that these talks were happening in the background, this literally doesn't give us any new information or cite any sources.

Looks like the… https://t.co/nNrzqjR66G pic.twitter.com/vVFuZ2UlEt

— CrediBULL Crypto (@CredibleCrypto) August 2, 2023

Binance has already been sued by the Commodity Futures Trading Commission for “willful evasion” of US laws and the Securities and Exchange Commission filed a lawsuit against the exchange that alleged it had sold unregistered securities illegally.

Startup Semafor launched in October last year and its co-founder and CEO is former Bloomberg CEO Justin Smith.  Editor-in-Chief and co-founder Ben Smith was previously a media columnist at the New York Times and a founding editor-in-chief of BuzzFeed News.

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