Cryptocurrencies dip as investors digest regulatory updates from industry heavyweights Binance, Kraken

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Founder and CEO of Binance Changpeng Zhao, commonly known as “CZ”, attends the “CZ meets Italy” at Palazzo Brancaccio on May 10, 2022 in Rome, Italy.
Antonio Masiello | Getty Images

Cryptocurrencies were slightly lower Tuesday, as investors weighed a batch of regulatory updates from Washington involving some of the biggest names in crypto: Binance, Kraken and Tether.

Binance Coin fell more than 1%, after rising as much as about 5% earlier. Ripple’s XRP fell 2.5%, Solana was down by more than 3%. Polygon and Uniswap lost 7% and 4%, respectively.

Meanwhile, bitcoin was off its lows and trading flat. Earlier, it was down with the rest of the crypto market. Ether was last lower by more than 1%.

The coins bounced after a sharp fall in the morning, after the Justice Department said it will announce “significant” crypto enforcement actions this afternoon. That followed a Bloomberg report Monday that the U.S. is seeking more than $4 billion from Binance, the largest crypto exchange in the world, to end its case against it.

“The digital asset market has been under substantial systemic pressure ever since the SEC initiated significant actions against Binance in March of this year, with the ongoing scrutiny of [CEO Changpeng Zhao] being an expected development,” said James Butterfill, head of research at CoinShares. “Nevertheless, the impact of this on the broader market is diminishing as Binance’s contribution to global trade volumes has sharply fallen from 85% at the start of the year to merely 30% now.”

He added that the decrease in Binance’s influence is parallel by the stability of bitcoin prices.

Also on Monday evening, the Securities and Exchange Commission alleged that crypto exchange Kraken has been operating as an unregistered broker, clearing agency and dealer and that it commingled customers’ crypto assets with its own. This is the second time this year the SEC has sued Kraken. In February the agency said Kraken failed to register the offer and sale of the crypto asset staking-as-a-service program.

Meanwhile, the DOJ on Tuesday commended Tether, the controversial operator of the biggest stablecoin in the crypto ecosystem, for its efforts in freezing $225 million of assets linked to a human trafficking syndicate in Southeast Asia.

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