The US Commodities Futures Trading Commission (CFTC) is reportedly investigating the world’s largest cryptocurrency exchange, Binance, for allegedly allowing American residents to conduct trades that violated US laws.
According to a recent Bloomberg report which cited unknown persons familiar with the matter, the CFTC wants to find out if Binance is allowing US residents to trade derivatives.
Due to a lack of regulatory approval in the United States, Binance does not provide its services to US residents. The exchange even goes as far as blocking U.S. residents from its website and also uses advanced technology to examine deposits and withdrawals for any signs of criminal transactions.
The company noted that it is very committed to complying with the laws set by financial regulators. In a statement, the company said,
“We take a collaborative approach in working with regulators around the world and we take our compliance obligations very seriously.”
CEO, Changpeng Zhao also labelled the development as misleading in a Twitter post, saying:
It’s not a bull market without some FUD.
Ignore FUD, keep BUIDLing.
— CZ 🔶 Binance (@cz_binance) March 12, 2021
CFTC Cracks Down On Crypto Exchanges In The US
The recent investigation into the activities of Binance is not the first. The US regulator, which regulates the country’s derivatives market, considers cryptocurrencies to be commodities and claims authority over its derivatives, including futures and options.
Therefore, cryptocurrency exchanges in the country face stricter demands if they offer these derivatives services. The CFTC has been probing into the affairs of several offshore crypto derivatives platforms.
Earlier, the regulator sued BitMEX, for failing to register as a broker. This regulatory scrutiny resulted in the downward spiral of the exchange’s market share.
In the meantime, the report notes that Binance has not been directly accused of any misconduct, and the case may likely not lead to any legal actions. However, if any legal action is taken against Binance, it would be the CFTC’s highest-profile crypto-related case.
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This article is Originally posted on CoinCentral.com
Author: Obike Favour