Breaking: Binance Under Investigation by CFTC

By Prashant Jha
Published March 12, 2021 Updated March 12, 2021
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Breaking: Binance Under Investigation by CFTC

By Prashant Jha
Published March 12, 2021 Updated March 12, 2021

Binance crypto exchange is reportedly under investigation by the US regulatory authorities from CFTC over the trading activities of the US customers. Early reports suggest that the authorities are trying to investigate whether the world’s largest crypto exchange allowed US traders to trade leverages.

The CFTC is investigating whether crypto exchange Binance allowed Americans to buy ‘derivatives’ and over ‘know your customer’ regulations.

Binance had to open separate crypto exchanges for the US market in the wake of regulatory clampdowns that barred Binance from offering its services in the country. The US subsidiary of the exchange only had an operating license for spot trading and not leverage trading.

Changpeng Zhao the CEO of the exchange had said that despite putting numerous filters to prohibit US customers from using Binance, traders always found a way around. The CEO hinted that the regulatory investigation is not something into its operations in the US and more about US customers bypassing restrictions to trade leverage.

The reports of the investigation by the US regulatory body come just a day after Binance appointed former US ambassador to China as its policy and government advisor. The recent developments regarding the investigation hint that the exchange might be aware of the possibility of an investigation.

Binance in its official statement said,

“We take a collaborative approach in working with regulators around the world and we take our compliance obligations very seriously,

The US Regulatory Body Intensifies Crackdown Against Non-Compliant Crypto Platfrom

The US regulatory body especially the CFTC has intensified its crackdown on crypto exchanges in recent times,  where it sued BitMEX for failing to register as a broker and the platform has suffered since then. Binance was already under regulatory scrutiny before launching its US subsidiary in 2019.

Coinbase, the top US crypto exchange which is all set to go public with a pre-market valuation of over $100 billion also revealed last month that it is responding to numerous CFTC probes. Back in 2019 when Binance US was launched as a separate entity to cater to the needs of the US customers.

The news of the investigation also reportedly set panic among BNB holders in China as most of the traders starting depositing their BNB on Huobi.


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About Author
Prashant Jha
1277 Articles
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.