The CFTC has decided to investigate if the crypto exchange Binance allows American traders to trade crypto derivatives without an appropriate license.
March 12, 2021 | AtoZ Markets – The Commodity Futures Trading Commission (CFTC) has initiated an investigation into the Binance cryptocurrency exchange. Bloomberg reports this citing sources close to the investigation.
The regulator intends to find out whether Binance allows American traders to its platform without an appropriate license as cryptocurrencies like Bitcoin (BTC) and ether (ETH) fall under their jurisdiction.
However, Binance founder and CEO Changpeng Zhao (better known as CZ) dismissed the reports during a live AMA on Clubhouse, saying that the report had “no teeth.”
“This is a topic that just came up, literally like a few minutes ago or a hour ago,” said CZ. “So number one, the news article said there was no, I don’t have it in front of me, there was no “misconduct,” I have to dig it up. So number one there was no report of misconduct from Binance, so the report kind of defeated itself.”
CZ noted that as a business Binance maintains a “no comment” policy on communications with authorities. After all, we can say that we are always cooperative in our work with the authorities around the world and that we take our legal obligations very seriously.”
Binance native token plummets 10% following CFTC investigation
According to CoinMarketCap, the price of the token exchange Binance coin (BNB) lost almost 10% of its value on the news and is trading at $265.69.
It is noteworthy that this is not the first time that an American regulator has made claims to large crypto companies. For example, AtoZ Markets reported that the CFTC had previously filed charges against another crypto exchange, BitMEX. Following the CFTC investigation, founders Arthur Hayes and Samuel Reed stepped down from their roles and responsibilities as CEO and CTO.
It is worth noting that the CFTC allegations come amid news that Binance has hired former US Senator and former US Ambassador to China Max Bockus to develop relations with government officials.
Meanwhile, the US Treasury is exploring new ways to strengthen the regulation of the crypto market. It is reported that the ministry intends to oblige banks to report on those who invest in cryptocurrencies. However, any details of the enhanced regulation are still unknown.
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