Bitcoin pushes higher despite the CFTC’s crackdown on Binance

Yahoo Finance Live’s Rachelle Akuffo discusses Bitcoin’s recent moves and provides an update on Sam Bankman Fried’s FTX trial.

Video Transcript

JULIE HYMAN: Well, Binance appears to be the focus for crypto watchers amid a CFTC crackdown. Our colleague Rachelle Akuffo spoke with former FTX spokesperson Kevin O'Leary on the sector and fears that Binance and founder CZ could be the next shoe to drop.

KEVIN O'LEARY: I think it's game over. Checkmate for CZ, and it's only a matter of time till there's a run on that DNB token, $64 billion. Now, either the Chinese government is backing that token, or they're not. But if there's a run on that, it's sayonara, CZ.

JULIE HYMAN: Well, Rachelle is going to be diving into Binance and the entire crypto industry later this morning. Obviously, he was quite outspoken on that and a lot of other stuff, but what can we expect to hear from your show this morning?

RACHELLE AKUFFO: Well, it's interesting because we're going to have some guests who are going to be coming up, looking at some of the repercussions here. Obviously, the CFTC suing the world's largest centralized digital asset platform Binance. Now, they're alleging that CEO CZ and his former compliance chief violated trading and derivatives laws, claiming the company has an ineffective compliance program.

Now, CZ has disagreed with the characterization of this on his blog post, but we did see Bitcoin fall alongside some other tokens on the news. It did recover, but investors pulled about $1.6 billion out of Binance in the 72 hours following that CFTC announcement. That's according to Blockchain data tracker Nansen. So we're going to be taking a look at that and the broader impact because a lot of crypto investors are wondering about the next shoe to drop. So we'll be diving into that.

BRAD SMITH: And so this is happening while regulators for traditional banks, they're dealing with their own fallout right now. So kind of pair the two together for us.

RACHELLE AKUFFO: Well, that is one of the issues that we're going to be talking about. Scott Melker, who's host of the "Wolf of All Street" podcast, he called out this irony, tweeting that regulators are busy fighting crypto while their own properly regulated system is collapsing around them.

Now, Scott is one of the people joining me in the 11:00 AM show, alongside Axios crypto reporter Brady Dale, looking at the next exchanges to watch, including, of course, Coinbase, given the size of its market share, where investors are moving their crypto. Also looking at how to walk that line when you have the two primary regulatory bodies obviously in crypto blurring the lines on how it's classified. You have the SEC, the vast majority of crypto, excluding Bitcoin, though, considered a security based on the Howey test, the CFTC seeing crypto as a commodity. So a different set of regulatory and legal requirements for each.

And just to note that the lawsuit with Binance is a civil one, not a criminal one, as in the case with the FTX and the Sam Bankman-Fried facing his 13th indictment today in federal court in Manhattan.

JULIE HYMAN: Right, he's going to be in court again at 11:00 AM?

RACHELLE AKUFFO: Yes.

JULIE HYMAN: Yeah.

RACHELLE AKUFFO: Just in time.

JULIE HYMAN: We'll look for the headlines. Just in time for the show, exactly.

BRAD SMITH: All right, going to see the floofy hair somewhere. Rachelle Akuffo, thanks so much for joining us this morning. Got a lot to look forward to at 11:00 AM with Rachelle.