CNBC's 'Mad Money' host Jim Cramer has expressed concern over the Commodity Futures Trading Commission's (CFTC) recent lawsuit against Binance, the world's largest cryptocurrency exchange. In an episode of his show, Cramer called Binance "a company gone rogue" and warned investors to be cautious.
The CFTC filed a complaint against Binance on Friday, accusing the exchange of operating illegally in the US and failing to register with the agency. The complaint alleges that from at least June 2019 through at least May 2021, Binance allowed US customers to trade derivatives products without being registered with the commission.
In response to the news, Cramer said he was worried about what other issues might come up with cryptocurrencies if regulators start cracking down on exchanges like Binance. He also noted that many people have made a lot of money investing in cryptocurrencies but cautioned that investors need to do their due diligence before putting their money into any investment.
"Binance is obviously one of those companies that you could say is just kind of out there," said Cramer. "And I think it makes sense for people who are trying to make money in this space or trying to invest in this space or even buy some crypto as a hedge against inflation … you want some order."
While acknowledging that regulations can be burdensome for businesses, especially new and innovative ones like cryptocurrency exchanges, he emphasized that they are necessary for protecting investors and ensuring fair markets.
As of now, it remains unclear how exactly the lawsuit will impact Binance’s operations going forward. However, given its size and popularity among traders worldwide — particularly retail traders — it may well face more scrutiny from regulators moving forward.
Despite his concerns about regulatory actions against companies like Binance potentially hurting investment opportunities relating to cryptocurrencies overall,Cramers suggests new rules aimed at bringing more order to the industry will be necessary if it is to thrive.
"I know it's hard. I know people don't like regulation," he said. "But this is a very new area and we need some guardrails."