The report that alleges the Binance exchange is being investigated came days after the company announced former United States Senator and Ambassador to China Max Baucus will be joining the firm to advise it on policy and government relations.
The Binance cryptocurrency exchange is under investigation by the United States Commodity Futures Trading Commission (CFTC) over concerns that it allowed American residents to trade derivatives products on its platform. The report which was first broken by Bloomberg also added that the trading firm has not been accused of any wrongdoing yet, citing sources familiar with the matter.
Cryptocurrency exchanges are always cautious of being at the crosshairs with US regulators over the admittance of its citizens and residents to trade on their platforms without proper registration and oversight from the appropriate watchdogs. Per the report, the CFTC is basing its investigation to determine whether Binance allowed US customers on its platform while not being registered accordingly.
Following the news, Binance coin (BNB), the native digital currency of the exchange fell about 6%, and it is currently exchanging hands at $269.52, down 3.50% in the past 24 hours.
The exchange has not issued a statement to confirm or deny the report but Binance Chief Executive Officer Changpeng Zhao popularly known as CZ said on Twitter that the news is all ‘FUD’, using an acronym for “Fear, Uncertainty, and Doubt.”
It’s not a bull market without some FUD.
Ignore FUD, keep BUIDLing.
— CZ 🔶 Binance (@cz_binance) March 12, 2021
At a Friday event on Clubhouse, CZ refused to comment on the alleged CFTC probe either but reaffirming his firm’s continuous efforts to maintain global regulatory compliance.
“We’ll continue to improve our compliance,” Zhao said. “We’ll also work very actively with regulators around the world to improve the compliance standards of the industry.”
Binance Exchange Lands Former US Senator Days Before CFTC Investigation
The report which alleges the Binance exchange is being investigated came days after the company announced former United States Senator and Ambassador to China under the Obama administration Max Baucus will be joining the firm to advise it on policy and government relations. Baucus told Bloomberg Binance is considering registering with the CFTC, but that the move is strictly a “business decision.”
As the largest exchange in the world by trading volume, Binance is reported to have as many as 300,000 new registrations per day, a meteoric growth which keeps regulators on high alert. In September 2019, the platform launched an entity that serves American residents dubbed Binance US and based out of San Francisco with licenses in various states, but CZ noted that users from the region have always devised clever means to bypass its advanced checks while registering.
“We have always blocked U.S. access, but users do find intelligent ways to get around our block sometimes and we just have to be smarter about the way we block,” he said in a November interview with Bloomberg.
At a time when more US corporate investors are beginning to take refuge in Bitcoin (BTC), and general crypto investments, Binance may have high hopes that the presence of Baucus will help improve the exchange’s relationship with the US regulators, in order to tap into the blossoming institutional adoption era.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
