Investors started to ask “why is Bitcoin down” and “why are altcoins down” after Bitcoin (BTC) down below $ 27,000 in the last 24 hours to $ 26,166. The most obvious reason for the decline in Bitcoin and altcoins is the news that Binance founder and CEO Changpeng Zhao (CZ) is accelerating the process of divesting his shares in Binance US, the US arm of the company.
Binance in Trouble!
According to The Information, Binance‘s founder and CEO CZ has been looking for ways to sell some of his Binance US shares since the summer of 2022. CZ, who is known to hold the majority stake in Binance US, accelerated the process of reducing his shares in the company after the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against the stock exchange and himself, and actively explored ways to reduce his shares in the company.
The CFTC recently announced that it had filed a civil enforcement action against CZ, along with three other entities operating the Binance platform, stating that CZ and others violated the Commodity Exchange Act (CEA) and CFTC regulations. However, the US regulator also charged and sued Binance’s former Chief Compliance Officer Samuel Lim.
Responding to the CFTC’s lawsuit, Binance and CZ said it was unexpected and disappointing. In a statement from both parties, it was stated that despite two long years of cooperation with the US regulator, the lawsuit was filed, the facts of the case were incomplete, and the defendants did not participate in it.
US Department of Justice Opens Investigation
On the other hand, the US Department of Justice has also taken action against Binance. The Justice Department has opened an investigation into Binance, the world’s largest cryptocurrency exchange by volume, for failing to comply with US sanctions against Russia. The authority is investigating whether Binance was illegally used by Russia to move funds to evade US sanctions.