Yahoo Finance Bitcoin falls on Binance fraud charge fear
Bitcoin dipped over 2% following news the US Department of Justice (DOJ) is reportedly contemplating bringing fraud charges against cryptocurrency exchange Binance.
Bitcoin (BTC-USD) fell below the $29,000 mark in early trade in Asia, but then bounced back modestly, with its price settling around $29,100 (£22,956), down over 2%.
The DOJ is hesitating over the fraud charges due to concerns over the negative impact on the larger crypto industry, according to Semafor.
Federal prosecutors are concerned charges against Binance could cause a run on the platform. They fear a repeat of the FTX collapse in November 2022 when an indictment led to a bank run that caused many retail investors to lose their money.
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US prosecutors are considering other options, such as fines and deferred or non-prosecution agreements, according to Semafor.
Binance and its founder, Changpeng Zhao, have already been slapped with charges by the Securities and Exchange Commission (SEC).
In June, the US financial regulator accused Binance of mishandling customer funds and lying to regulators and investors about its operations.
It comes as bitcoin's price sees some stability as trading volumes remain low.
"Bitcoin is wavering above the $29,000 level as traders await any updates with a US spot Bitcoin ETF," Edward Moya, senior market analyst for foreign exchange market maker Oanda, wrote in a note.
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"Fresh money has not yet been coming into the cryptoverse so range trading might remain a while longer."
Confidence in bitcoin and the cryptocurrency market was also affected by a hack on the Curve Finance decentralised exchange on Sunday which lead to a loss of around $70m, according to Chainalysis.
The attackers exploited a weakness in Vyper, a Python-based programming language for Ethereum (ETH-USD) smart contracts utilised by Curve and other DeFi platforms.
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