The regulatory hassles of leading crypto exchange Binance continue in a new development that sees the US Community Futures Trading Commission investigate it. According to reports, the CFTC is accusing Binance of insider trading, which is illegal under existing regulations. Binance is also alleged to have engaged in market manipulation.
Binance is yet to take a breather from a series of investigations it has faced from regulators around the world in the last few months. Details on the allegations of insider trading and market manipulation show that the US CFTC is investigating Binance and its employees who might have taken advantage of users of the exchange to benefit from their trading activities, according to unnamed sources.
Binance Holdings in the Crosshairs of US CFTC
Earlier, reports emerged that Binance had a run-in with the CFTC based on derivatives trading which is prohibited in the US. However, these reports were dismissed by Binance which also passed off the alleged run-in as regular interaction between itself and the regulator. Interestingly, the investigation launched by the CFTC is against Binance Holdings, despite having a US arm known as Binance.US. Following the latest inquiry into Binance’s operations, sources reported that the US CFTC is already obtaining witnesses to present evidence and testify against the exchange.
In its defence, the leading crypto exchange has claimed that it has zero tolerance for insider trading and operates stringent ethics against actions that are likely to cause harm to its users or their funds. Binance’s spokesperson noted in his statement that the exchange has a longstanding history of bringing to book errant employees who were found guilty of any misconduct, with the least sanction being employment termination.
Crypto Exchanges In a Showdown with Regulators Globally
Binance is not the only crypto exchange facing the throes of non-compliance with existing financial regulations. Exchanges like Kraken, Coinbase have had a few confrontations with regulators in different regions. Binance’s are prominent due to being one of the leading crypto exchanges globally. The CFTC’s latest investigation into Binance’s operations is not an indication that the crypto exchange has been deemed guilty of all allegations.
Binance does not only have the CFTC hot on its heels for defaulting on regulatory compliance. On separate occasions, the US Department of Justice and the US Internal Revenue Service have launched inquiries into whether Binance was being used for money laundering and tax evasion, both of which the exchange has vehemently denied.
Back in July, Chief Executive Officer (CEO) of Binance, Chanpeng Zhao, fondly known as CZ alleged that there was a hyper-focus on his crypto exchange in terms of regulations. At the height of the conflict with regulators in the US, Singapore, Canada, the UK, Cayman Island, South Korea, CEO CZ noted that compliance is a journey. During this period, Brian Brooks, a former Comptroller of Currency in the US, resigned as the CEO of Binance.US after serving for barely three months.