The Binance Coin price is bouncing back after crashing to a multi-week low of $528 yesterday. BNB is trading at $580, which is 10% above yesterday’s low but 15% below its all-time high. It is the third-biggest cryptocurrency in the world after Bitcoin and Ether and has a market capitalization of more than $89 billion.
Binance is the biggest cryptocurrency in the world with tens of millions of users. Its daily volumes are also substantially higher than that of Coinbase, which is the only publicly traded exchange.
Now, authorities at the Department of Justice (DoJ) and the Internal Revenue Service (IRS) are investigating the company. Precisely, they are probing whether the company facilitates money laundering and whether it helps to aid tax evasion.
The company has denied any wrongdoing and said that it will continue to cooperate with authorities. Binance Coin declined after Bloomberg broke the news. It said:
“We have implemented strong access controls that have been tested via external audit and are under continuous review and evaluation by Binance to ensure that the appropriate restrictions are in place and are effective.”
This is the second high-profile of a major blockchain company by authorities. The Securities and Exchange Commission (SEC) has been investigating Ripple Labs, the developers of XRP. The case is still going on in a US court.
Implications for Binance Coin
The ongoing probe is not good for Binance and Binance Coin. However, the situation will likely not be as bad as many analysts expect. For one, historically, these investigations tend to end with a fine and promises to tighten controls. Indeed, most big banks like Deutsche Bank, Wells Fargo, and Goldman Sachs have paid substantial fines before.
The impact will also be minimal for the Binance Coin price. For starters, Binance Coin is the native currency for the Binance Chain. This is a platform that is similar to Ethereum in that it helps developers build decentralized applications. Indeed, it is a fast-growing network that has been used to develop several high-profile projects like Binance USD, PancakeSwap, Ontology, The Graph, and Venus.
Still, the only way in which the case will affect the BNB price is through the negative headlines and sentiment among traders.
Projects built on Binance Chain
Binance Coin price prediction
The four-hour chart shows that the Binance Coin price has been under pressure in the past few days. The chart shows that the price dropped below the lower line of the rising wedge pattern that is shown in blue. In technical analysis, this is usually a bearish pattern.
The 25-day and 50-day moving averages have made a bearish crossover pattern. This, too, is usually a bearish signal. Therefore, in the immediate short term, I can’t rule out another pullback as bears attempt to move below $500. However, in the next few weeks, I expect that it will rebound and retest its all-time high.