Binance Under DOJ Radar: Fraught Times for Crypto Giant and Its Token BNB

• Binance is under increasing regulatory scrutiny, with the Department of Justice (DOJ) contemplating pressing fraud charges against the platform.
• The situation has begun to negatively affect Binance Coin (BNB) protocol, marking a decline in activity on the BNB chain and its generated revenue.

Binance, the well-known cryptocurrency exchange and its native token Binance Coin (BNB), have found themselves in the regulatory crosshairs over the past month. A series of recent incidents have put substantial pressure on both the exchange and its associated coin, the BNB protocol. The troubles for Binance are seemingly far from over, with the U.S. Department of Justice (DOJ) now entering the fray.

Regulatory Hurdles on the Horizon

The DOJ is reportedly deliberating the pressing of fraud charges against Binance. However, the Justice Department has exhibited a degree of hesitation, mindful of the possible repercussions for customers. The August 2nd report from Semafor, referring to knowledgeable sources, revealed that the DOJ fears replicating the FTX debacle of 2022. Thus, it is considering alternatives, such as imposing fines or arranging non-prosecution agreements with Binance to avert consumer harm.

Already caught in the vortex of regulatory scrutiny, Binance is grappling with accusations of a criminal investigation in the U.S. for purported violations of sanctions against Russia. Furthermore, Binance came under fire from the U.S. Securities and Exchange Commission (SEC) in June. The SEC alleged that the exchange offered unregistered securities and operated unlawfully, leading to a lawsuit.

The Commodity Futures Trading Commission also initiated action against Binance and its CEO, Changpeng “CZ” Zhao, in March. They were accused of violating trading and derivatives regulations. The mounting regulatory scrutiny has serious implications, not only for Binance but also for the entire crypto sector and products associated with it.

BNB Chain: A Turbulent Ride

The regulatory troubles surrounding Binance have inevitably spilled over onto the BNB protocol. The past 24 hours saw a 4.8% dip in activity on the BNB chain, according to data from Token Terminals. The revenue generated by the protocol mirrored this downturn, slipping by 4.2%.

As for the BNB token itself, the price has experienced a significant correction over the past month, with a decline from $247.12 to $237 in the previous week. However, the token’s trading volume has defied this trend, recording substantial spikes. From July onwards, BNB’s trading volume surged markedly, jumping from 369 million to 550 million. This surge in trading volume amid a downward price trend reflects the volatile environment currently enveloping Binance and its BNB token.

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