Senators Ask Department of Justice to Investigate Binance for “Lying”

Paigambar Mohan Raj
Source: CryptoSlate

According to a Bloomberg report, a letter from two Senate democrats has asked the U.S. Department of Justice to investigate Binance. Senators Elizabeth Warren (D-Mass.) and Chris Van Hollen (D-Md) claim that the exchange may have lied to lawmakers about its business practices. The letter was addressed to U.S. Attorney General Merrick Garland.

The pair asserts that the cryptocurrency exchange might have made untrue assertions about Binance US being a separate entity. The lawmakers wrote that “This is a serious matter.”

This is not the first time the two senators have gone against the exchange. In March, Warren and Hollen said that the exchange is a “hotbed of illegal financial activity.” They had also requested the firm’s financials and anti-money laundering practices.

The March letter also said that “While Mr. Zhao has claimed that Binance.US, is a “fully independent entity,” in reality, he controls the company as a “de facto subsidiary” of Binance.” 

SEC’s lawsuit does not bother Binance users?

Despite the SEC’s crackdown on Binance, users of the platform dont seem to be slowing down. Options-based implied volatility metrics show that users are still trading using the world’s largest crypto exchange by volume.

Based on options data, implied volatility (IV) represents investors’ expectations for price volatility over a certain time frame. Rising option demand and the ensuing rise in implied volatility may imply rising market apprehension and the possibility of increased price volatility in either direction. The spike in implied volatility for Bitcoin (BTC) so far has been at best modest.

The SEC’s action is more detrimental to alternative cryptocurrencies, or coins other than bitcoin, according to Griffin Ardern, a volatility trader with the crypto asset management company Blofin.

Binance’s BNB token has taken a beating in the aftermath of the lawsuit. The token is down 12.7% over the previous week, and at press time was trading at $265.99.