Legal pressure on Binance, the world’s largest crypto exchange, has underscored the potentially “chilling” effect of a U.S. crackdown on crypto, legal experts have told Decrypt. The company is facing scrutiny from multiple agencies, including a suit filed by the Commodity Futures Trading Commission (CFTC) against both Binance and its founder Changpeng ‘CZ’ Zhao last month. Court documents filed on Monday show that lawyers at top firms have been brought in to represent both the company and Zhao himself in the case. Meanwhile, the Department of Justice is investigating Binance’s conduct in a probe led by its money laundering squad and the Securities and Exchange Commission (SEC) is looking into the company’s business practices. This week, Binance’s U.S. arm called off its acquisition of bankrupt Voyager Digital’s assets, a deal that had met with opposition from several regulators including the SEC. Commentators have suggested that this is due to the regulatory uncertainty in the U.S. William Kraus, partner at FisherBroyles LLP, warned against seeing Binance’s difficulties as a direct response to the current climate, but noted that it signals to crypto businesses looking to operate in the U.S. that they will need to navigate a “complex and frequently changing legal and regulatory landscape”. Sam Tyfield, a corporate M&A lawyer at British firm Shoosmiths, added that the developments are not just significant for the U.S. but for the rest of the world as well, noting that while regulators in the EU and Asia “may seem more flexible currently”, they are “only one broker or trading platform blow-up away” from imposing a regime as harsh as that of the U.S.

Binance is facing legal pressure from multiple agencies in the U.S., including the Commodity Futures Trading Commission (CFTC), Department of Justice and the Securities and Exchange Commission (SEC). This could have a “chilling” effect on the market as well as other crypto businesses looking to operate in the U.S. due to the complex and constantly changing legal landscape. It is also a warning sign to other countries, as they may be just one platform blow-up away from a similarly strict regulatory approach.

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You can read more about this topic here: Decrypt: Binance CEO Lawyers Up Amid ‘Chilling’ U.S. Crypto Regulatory Climate

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