U.S. Department of Justice (DOJ) officials are contemplating fraud charges against the world's largest cryptocurrency exchange, Binance, but there are some concerns about potential consumer fallout and market instability, according to a bombshell report by Semafor.
Federal prosecutors fear an indictment could trigger a run on the exchange, similar to the one which led to the bankruptcy of platform FTX, and are exploring alternatives such as fines or non-prosecution agreements.
The predicament underscores the complex nature of crypto enforcement and regulation in the U.S., which currently exists in a legal gray area.
Binance and its founder, Changpeng Zhao, have already been slapped with charges by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission, alleging the operation of an unregistered exchange in the U.S. and manipulation of trades.
CZ remains unfazed
In a seemingly defiant response to the scrutiny, Zhao (commonly known as CZ), cryptically posted "4" on his social media profile. This is an oft-repeated reference to Binance Coin (BNB) maintaining its position as the fourth largest cryptocurrency by market cap.
BNB is still above XRP
Following the report, BNB experienced a drop of 2.5%, currently trading at $237.42. Despite the dip, Binance's native token maintains a slight edge over Ripple-affiliated XRP. The two cryptocurrencies are worth $36.9 billion and $35.9 billion, respectively.