The CFTC starts investigation on Binance over insider trading reports after it already started investigating whether the exchange illegally let Americans use the exchange as we read in our latest binance news.
Binance was plagued lately by high-profile regulatory admonitions and it is now under investigation over insider trading reports. The report came from Bloomberg and cited anonymous sources with knowledge of the investigation stating that the Commodity Futures Trading Commission is involved. The CFTC sees Bitcoin traded in millions on Binance and as a commodity that falls under the jurisdiction in cases of fraud or market manipulation. The CFTC also has a regulatory purview over teh derivatives trading in the US like crypto trading products which are offered on Binance’s global exchange but not on its US affiliate.
Binance is being probed by the CFTC which was looking into whether the world’s top exchange allowed illegal US residents to use the service. The Department of Justice Internal Revenue Service also started looking into the company’s activities as per the report. Binance’s issues started expanding beyond US borders since now the CFTC starts an investigation on the exchange over insider trading reports. The UK FCA kicked things off in June and issued a consumer warning about Binance Markets Limited which Binance acquired and renamed hoping to become a UK-only exchange. Things got worse on the regulatory front in July once the Cayman Islands Monetary Authority explained that the company wasn’t authorized as a crypto exchange on the Caribbean island. Binance is incorporate in the Cayman Islands and one spokesperson said:
“Binance.com does not run a cryptocurrency exchange out of the Cayman Islands. We do however, have entities incorporated under the laws of the Cayman Islands, performing activities that are permitted by law and not related to operating crypto exchange trading activities.”
Other financial regulators targeted entities under the binance Group umbrella including Singapore, Italy, and the Netherlands as well as Japan. Over the past week, Binance CEO Changpeng Zhao conceded that the company needs a centralized entity to work well with the regulators. This could help assuage concerns from the agencies that take issues with the company’s unclear headquarters and operating structure but this will not help the exchange fight insider trading claims. Another Binance spokesperson said:
“We have a zero-tolerance policy for insider trading.”
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