Cryptocurrency exchange, Binance is being investigated by the U.S. Commodity Trading Futures Commission (CTFC) over concerns on whether it allowed American investors to trade crypto derivative products while not being registered under the government agency’s oversight, as reported by Bloomberg. The report did specify that Binance has not been accused of any wrongdoing. Binance Under CFTC Investigation The U.S. Commodity Trading Futures Commission (CTFC) regulates the trading of derivatives in the United States. Binance isn’t registered with the regulatory agency. Hence, the CFTC is probing on the matter of whether Binance enabled derivatives trading on its exchange without reporting the matter to the agency. Binance has not been accused of misconduct and the probe might not lead to enforcement action, Bloomberg reports. Binance platform blocks the U.S. traders from its official and maintains a separate Binance.US site that is compliant with US regulations. The CFTC believes that cryptocurrencies come under commodities, therefore the organization has the regulatory power over crypto trading. Therefore, any trading activities that involve futures or derivatives would need to be overseen directly by the regulatory agency. Binance exchange has not released a statement on the matter. However, its CEO Changpeng Zhao responded on the news by tweeting: “It’s not a bull market without some FUD.” It’s not a bull market without some FUD. Ignore FUD, keep BUIDLing. — CZ 🔶 Binance (@cz_binance) March 12, 2021 Binance native token, BNB dropped by 6% shortly after the news broke. BitMEX Too Faced CFTC Enquiry Over Crypto Derivatives Trading This is also not the first time that the CFTC has probed a cryptocurrency exchange. In July 2019, the regulator launched an investigation on whether the derivatives platform BitMEX allowed American investors to trade crypto derivatives on its platform. The investigation resulted in a formal indictment by the CFTC and the U.S. Department of Justice against BitMEX and its cofounders last year. Meanwhile, in November, CFTC filed criminal charges accusing founders and executives of the BitMEX of not taking sufficient steps to prevent money laundering.
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