Binance under CFTC Scrutiny over Unregistered Trading Activities

Binance under CFTC Scrutiny

March 13, 2021

Reading Time: 2 minutes

Giant cryptocurrency exchange Binance is under investigation by the Commodity Futures Trading Commission over alleged US trading without prior registration.

Undisclosed sources familiar with the matter have revealed to various news outlets that CFTC is looking into Binance to establish whether it allowed U.S investors to buy and sell cryptocurrency on its site.

Strict U.S Regulation Shuts out American Traders from Binance

The U.S CFTC categorizes virtual currencies including Bitcoin and Ethereum as commodities, whose futures and other derivatives fall under its jurisdiction. Thus, any platform that engages in exchanging these virtual currencies should be duly registered with them.

Because of the strict regulation in the U.S, Binance restricted U.S passport holders to access their services back in 2019. Since then, the crypto exchange firm has been actively directing efforts towards blocking the U.S from trading. The CEO and co-founder of the giant cryptocurrency exchange Changpeng Zhao commented on the audio-based social media platform Clubhouse that the firm closely follows the U.S rules and are continually preventing U.S customers from laundering money on the site.

The CFTC probe news comes just a day after the crypto exchange firm announced that it had hired Max Baucus, the former US senator and America’s ambassador to China. Baucus is to offer more insight into the US policy and regulation to help further the firm stay on the legal side of these rules.

Did Binance Cave to U.S Traders?

According to the latest reports, it seems that Binance eventually caved and began letting U.S denizens trade on the site. Its ambition of becoming mainstream in the United States may have been broken by this CFTC investigations. The investigation is, however, still at the beginning stages and could lead to nowhere.

The giant cryptocurrency exchange has not responded to the claims. After the information was out, Binance’s BNB dropped by 6%. According to Zhao’s Twitter update, the news is nothing but FUD (Fear, Uncertainty, and doubt). He emphasized that there would be no bull market without some FUD.

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