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Could crypto crackdowns curb financial markets?

Posted by Bulldog Law | Feb 22, 2023 | 0 Comments

The United States justice system is based on innocence. Evidence presented in front of a judge must prove a suspect's guilt…so long as that requires illegal activity.

Although each legal case is unique, it's probably difficult to imagine defending yourself against laws that aren't yet established. Yet, this is the type of uncertain compliance looming over Binance – and the crypto community as a whole.

Debates about suggested criminal activity

Decisions made inside of a courtroom become increasingly difficult when those involved in an investigation disagree. And although you might believe legislation should change with the times, you might consider asking what happens when a trial's decision is based on ambiguity.

An investigation that began in 2018 involved prosecutors from three Justice Department offices. Charges against the world's largest crypto exchange alleged illicit business practices which include:

  • Plotting to evade regulators
  • Processing payments for those trying to dodge U.S. sanctions
  • Slacking on anti-money laundering controls

The platform currently awaits a ruling, potentially attached to financial penalties. Meanwhile, it raises questions about whether governing digital exchanges might result in more harm than good.

Internal predictions about external pressure

A Binance spokesperson noted that although the U.S. has a history of innovation, regulating cryptocurrency may lead to market volatility, with investors paying the cost.

Earlier this month, Binance suspended cash withdrawals for international customers, at least temporarily. That decision followed acknowledging stablecoin issues.

The exchange reported plans to regain traction again as soon as possible. However, whether that's plausible remains to be seen.

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