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Binance might peak for U.S. crypto enforcement cases, says CFTC official

Binance logo is seen in this illustration taken March 31, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

After the $4.3 billion settlement with Binance that took place last month, enforcement action against cryptocurrency companies may have reached its pinnacle. This is because instances of this nature offer businesses a “template” for managing them, according to a top U.S. regulator who stated this on Tuesday.

The Justice Department was responsible for negotiating Binance’s settlement with the Commodity Futures Trading Commission (CFTC) and the Treasury Department. The settlement was reached because Binance violated anti-money laundering and sanctions laws in the United States.

According to statements made by CFTC Commissioner Kristin Johnson at an FT crypto and digital assets symposium, the United States government has initiated many legal proceedings against cryptocurrency companies like Binance, which have contributed to the establishment of “guardrails” that have provided “order and structure” to the market.

“I would hope that we have seen a spike, and what we will see going forward is that these early cases will be a bit of a cautionary tale for those firms that want to operate in this ecosystem,” according to Johnson.

She asked cryptocurrency companies to investigate the Binance settlement to better understand the governance standards authorities look for in cryptocurrency companies.

A pattern is becoming increasingly evident for how businesses should operate in this arena, and it is ideal for companies that genuinely want to be successful in their operations. Observe the implication,” Johnson said.

Furthermore, the Commodity Futures Trading Commission (CFTC) would be “deeply thoughtful” about the requirement of enhanced disclosures for crypto businesses that are vertically integrated, meaning that they combine diverse operations under one roof.

In addition to developing standards, the European Union has become the first organization to establish complete laws for cryptocurrency markets. Britain, cultivating dreams to become a cryptocurrency “hub,” has also drafted these guidelines.

In light of businesses looking for stability, Brian Quintenz, global head of policy at a16z crypto, a venture capital fund, stated that the sooner the United States offers regulatory clarification, the less advantage Britain would have gained.

Quintenz, a former commissioner of the Commodity Futures Trading Commission, stated at the conference, “I do not see clarity in the United States, perhaps the most optimistic case is three years.”

Meanwhile, cryptocurrency companies are establishing operations in the United Kingdom to construct an ecosystem capable of catering to the rest of the globe and taking advantage of “nuanced” authorities, as Quintenz states.

According to Xiao-Xiao Zhu, digital operational partner at investment business KKR, the trend involves establishing regional crypto centers as the regulations in those areas become more transparent.

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