According to Bloomberg, the CFTC began investigating the activities of the Binance cryptocurrency exchange due to concerns that it allows US citizens to trade cryptocurrency derivatives in violation of the law.
The Commodity Futures Trading Commission (CFTC) is trying to find out if the Binance platform allowed US residents to buy and sell cryptocurrency derivatives. If this is true, then the activities of the marketplace violate US law, since Binance is not registered with the CFTC, the agency said.
Binance CEO Changpeng Zhao said the exchange does not have an official headquarters, so the investigation will not lead to enforcement action. The CFTC treats Bitcoin and Ether as exchange commodities, which is why futures contracts are under the jurisdiction of the CFTC. Platforms offering such products to US citizens are required to comply with strict regulatory requirements, regardless of their location.
Zhao stated that the exchange did not take any action that violates US law. Zhao said that he usually does not comment on interactions with regulators. According to him, this investigation does not mean that the department is trying to bring charges against the exchange. The Binance founder also suggested that his competitors might bribe or pressure journalists to publish defamatory material containing false information. Zhao cited the example of Forbes, which last year published an article about the “Tai Chi organization” allegedly created by Binance to circumvent the requirements of US regulators. Binance later sued Forbes, accusing the publication of libel, but dropped the claim last month.
Zhao added that Binance takes regulatory compliance seriously and is implementing appropriate measures to combat money laundering. The marketplace will continue to interact with international regulatory bodies to improve compliance with industry standards. The head of Binance said that the exchange is blocking American traders from accessing its site, and is also using advanced technologies to detect suspicious activities. However, users can always find clever ways to bypass the blocking. Zhao said regulators are enforcing “too strict” rules for cryptocurrency firms. At the same time, he expressed the hope that industry players and regulators will soon come to an understanding.
Against the backdrop of this news, Bitcoin fell to $ 54,960, while the value of BNB, Binance’s internal coin, fell to $ 247.5. Zhao tweeted that Fear, Uncertainty and Doubt (FUD) is common in a bull market. Therefore, Zhao urged users not to panic, but rather stay active.
It’s not a bull market without some FUD.
Ignore FUD, keep BUIDLing.
– CZ Binance (@cz_binance) March 12, 2021
US regulators are stepping up measures against the cryptocurrency industry. So, in 2019, the BitMEX trading platform also came under close scrutiny from the CFTC. In addition, last fall, Coinbase management reported that during the first half of 2020, the exchange received more than 1,900 requests from law enforcement agencies, including the CFTC.
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