CFTC investigates Binance over possible violations in trading activities

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Binance Holdings – the biggest cryptocurrency exchange – is being investigated by the Commodity Futures Trading Commission over concerns it allowed Americans to place bets that infringed on U.S. policies.

The CFTC is conducting a probe to find out if Binance allowed U.S. residents to trade derivatives that CFTC regulates, according to Bloomberg News, citing sources with knowledge of the matter.

No wrongdoing committed

Binance native token, BNB, was down 6% shortly after the news. The price of bitcoin (BTC) dropped after the news. The crypto fell 1.5% to $56.685.01 as of 4:15 p.m. New York time.

Binance, which was founded in China, has an office in Singapore and is not registered with CFTC. The crypto exchange has not been accused of wrongdoing and the investigation may not lead to any enforcement action, the report said.

The probe is the latest sign that market regulators may foil the crypto industry’s aspiration of becoming more widely accepted for U.S. investors. The CFTC views cryptocurrencies like bitcoin and ether to be commodities and therefore oversees its futures and other derivatives.

Unfazed by the inquiry

“We have always blocked US access, but users do find intelligent ways to get around our block sometimes and we just have to be smarter about the way we block,” Business Insider quoted Binance co-founder Changpeng Zhao as telling Bloomberg in November.

Zhao has maintained that the company complies with US regulatory policies. In 2019, the crypto exchange forged an alliance with BAM Trading Services, which launched Binance.us in San Francisco. Binance licenses its matching engine and electronic wallet technologies to Binance.us, according to Insider.

Meanwhile, Zhao is actually not bothered by the investigation. In fact, he brushed off the news on Twitter by saying it’s all FUD (fear, uncertainty, and doubt). “It’s not a bull market without some FUD. Ignore FUD, keep BUILDing,” he tweeted.

Image courtesy of Cointelegraph News/YouTube

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