Major crypto exchange Binance is being investigated by the US Commodity Futures Trading Commission (CFTC) over concerns that it allowed Americans to place wagers that violated US rules, Bloomberg reported, citing undisclosed people familiar with the matter.
The CFTC is seeking to determine whether Binance, which isn’t registered with the agency, permitted US residents to buy and sell derivatives that the regulator polices, the report said, adding that the platform hasn’t been accused of wrongdoing.
Binance coin (BNB), ranked 4th by market capitalization, is down by 7% in the past hour (13:22 UTC), reaching USD 260, bitcoin (BTC) is down by 1.5%, to USD 55,907.
The CFTC and BINANCE declined to comment, per the report. However, Binance added that they "take a collaborative approach in working with regulators" and they take their "compliance obligations very seriously". In the US, per the exchange, they block US residents from its website and analyze deposits and withdrawals for signs of illicit transactions.
In November 2020, Changpeng Zhao, CEO of Binance, said that the company is "continually" trying to improve ways they're blocking users in the US from accessing Binance.com, as users "do find intelligent ways to get around our block sometimes and we just have to be smarter about the way we block." (Learn more: Binance.com Closing Another Door On Americans, Responsible For 7% Of Its Traffic
The CFTC considers cryptoassets to be commodities and claims jurisdiction over their futures and other derivatives.
The commision already charged founders of another crypto giant, BitMEX, with operating an unregistered trading platform and violating multiple regulations. First reports about the ongoing investigation appeared in July 2019, while the official charges were announced in October 2020.
As reported yesterday, Binance has named Max Baucus as a policy and government-relations adviser. Baucus, a 79-year-old Democrat who served as Senator from Montana for more than three decades including a seven-year stint as Chairman of the Senate Finance Committee, and later as US ambassador to China from 2014-2017, will provide guidance and policy advice covering some of the world’s most important financial jurisdictions and agencies.
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Reactions:
It’s not a bull market without some FUD.
— CZ ?? Binance (@cz_binance)
2/ my superficial hot take on the binance CFTC news - given recent context, unlikely to be a big problem. I’d gues… https://t.co/viGLGA8Lpx
— Ari Paul ?? (@AriDavidPaul)
here you go: they don't even know which Binance entity to investigate
— Crypto_Ed_NL (@Crypto_Ed_NL)
In this bullish market FUD is just a bump on the road - an opportunity to buy more before it fades away with more b… https://t.co/5CPE53CcH5
— yTedd (@TeddyCleps)
@SplitCapital Bybit?
— Hasu (@hasufl)
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Learn more:
- Crypto Exchanges to Spend 2021 Focusing on DeFi, UX, and New Services
- Binance Shoots Itself In The Foot Amid Regulatory Scrutiny On Exchanges
- Can't Beat Crypto Regulators? Educate Them
- Regulators Ponder Strategy As Bitcoin & Co Are Too Large to Ignore
- Tether & Bitfinex Settle NY AG's Probe, Expect More Transparency
(This article is being constantly updated.)
