Binance, the largest cryptocurrency exchange, is facing accusations of commingling customer funds totaling billions of dollars and regulatory breaches. Anonymous sources claim that Binance frequently used the collapsed Silvergate Bank for mixing funds. The stablecoin at the center of the dispute, BUSD, has been accused of being used to credit user accounts rather than genuine U.S. dollars. Binance denies the allegations, but the U.S. Commodity Futures Trading Commission (CFTC) has levied severe accusations against the company, alleging that it allowed trading firms based in the U.S. to engage in crypto derivatives trading on its international exchange while commingling funds and circumventing compliance controls.

The United States has witnessed a surge in regulatory actions against cryptocurrency, leading businesses to consider relocating their operations overseas.

Former commissioner of the United States Commodities Futures Trading Commission, Dan Berkovitz, has suggested that Ethereum's native Ether (ETH) token could be both a commodity and a security. This is due to the overlapping legal definitions of commodities and securities, meaning that an asset can be classified as both.

Christy Goldsmith Romero, a Commissioner of the U.S. Commodities and Futures Trading Commission (CFTC), has stated that due to the sheer volume of fraud in the crypto space, it is difficult for the federal regulator to effectively police the industry. She revealed that crypto cases account for about 20% of the CFTC’s portfolio, including ongoing civil cases against bankrupt crypto exchange FTX and crypto giant Binance.

Christy Goldsmith Romero, a commissioner at the Commodity Futures Trading Commission (CFTC), has stated that there is too much cryptocurrency fraud for the agency to police all of it. She added that cryptocurrency cases account for around 20% of the CFTC's portfolio, including recent civil cases against Binance and FTX exchanges. While Goldsmith Romero denied any "turf war" between the CFTC and the Securities and Exchange Commission over regulating crypto, she acknowledged that the agencies are still figuring out how to regulate the industry's new products. She also warned crypto companies not to view the CFTC as a "light touch regulator."

Commodity Futures Trading Commission Chair Rostin Behnam has stated that decentralized crypto exchanges will be regulated by either the CFTC or the Securities and Exchange Commission, even if they are based on self-effectuating protocols.

The US Securities and Exchange Commission is reportedly taking enforcement action against Binance or Binance.US, the world's largest crypto exchange. Binance has faced enforcement action from the US CFTC and ongoing probes by the DOJ for violating sanctions against Russia. The SEC has sent a Wells notice to Coinbase, but Coinbase has stated that this will have no impact as it doesn't list securities. Binance has paused Bitcoin withdrawals due to congestion on the Bitcoin blockchain. Both Binance and Coinbase are under scrutiny from the US SEC.

Lawmakers in the House Agriculture and House Financial Services committees discussed the need for regulatory clarity in the crypto market structure in the United States during a joint hearing of the digital assets subcommittees. The competing enforcement actions by the SEC and CFTC have forced entrepreneurs, developers, and job creators offshore, and the proposed framework aims to address this issue. The framework includes tailored compliance pathways and modernizing securities regulations to suit the reality of crypto marketplaces dealing directly with retail customers.

One year after Biden's executive order on increased scrutiny and regulation of the crypto industry, there remains little clarity on which federal regulator will be tasked with the job. The SEC and CFTC both see crypto assets as their exclusive territories, but a principles-based regulatory approach is needed for the industry's development. The SEC defines most cryptocurrencies other than Bitcoin as securities, while the CFTC defines them as commodities.

Brian Quintenz, the head of policy at a16z crypto and a former CFTC commissioner, said Friday that new legislation was needed in Congress amid ongoing regulatory uncertainty in the U.S. and what's been perceived by some as a widespread crackdown on the crypto sector by the Securities and Exchange Commission.