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The U.S. Commodity Futures Trading Commission (CFTC) could require Binance to cease operations in the U.S. as part of a potential settlement, Bernstein said in a research report on Tuesday.

The CFTC is charging Binance with violating laws around futures offerings, illegal off-exchange commodity options, failing to register as a futures commissions merchant, designated contract market or swap execution facility and other charges related to its know-your-customer (KYC) or anti-money laundering (AML) processes.

Binance.US is a minor part of the overall business and makes up less than 5% of the exchanges global operations, the report said.

Given that cryptocurrency trading is a global business, Bernstein expects that Binance will look to safeguard its dominant international business, which is its cash cow, and where it has worked on licenses in Europe, Africa and Australia, analysts Gautam Chhugani and Manas Agrawal wrote.

The broker says this latest enforcement is not material to overall crypto markets as Binance.US operations are not material, and it doesnt expect this news to trigger a large selloff in the market, as the regulatory narrative has pivoted from the U.S. to expected Hong Kong and China flows. The Hong Kong retail crypto market is expected to open up from June 1.

Bitcoin (BTC), the largest cryptocurrency by market cap, was trading 2.8% lower at $27,047 at time of writing.

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CFTC Could Force Binance to Cease U.S. Operations as Part of Settlement: Bernstein - CoinDesk