Binance, the world’s largest cryptocurrency exchange by trading volume, is reportedly now under investigation for possible insider trading and market manipulation by the United States Commodity Futures Trading Commission (CFTC).
Fast facts
- According to a Bloomberg report that cited unnamed sources, investigators from the CFTC — the agency that regulates the U.S. derivatives markets — are looking into whether Binance exploited its customers by taking advantage of their trading activities.
- In response to a request for comments, a Binance spokesperson told Forkast.News that Binance had “a zero-tolerance policy for insider trading and a strict ethical code related to any type of behavior that could have a negative impact on our customers or industry.” Binance security team has a long-standing process “to investigate and hold those accountable that have engaged in this type of behavior, immediate termination being minimal repercussion,” the spokesperson added.
- CFTC’s purported investigation follows earlier probes by U.S. authorities over Binance’s alleged money laundering and tax breaches as well as whether it had allowed U.S. residents to trade derivatives. It also comes as the exchange faces intensifying scrutiny from regulators around the world, including Japan, Singapore, Italy, Germany, Cayman Islands and South Africa. In response, the exchange has been trying to hire more executives specializing in compliance, reining in its product offerings such as high leverage and trading of stock tokens, and has withdrawn from some jurisdictions, such as Singapore and Ontario, Canada.
- Binance is also facing legal heat from its customers. A group of Binance customers who suffered trading losses after the exchange experienced a technical outage in May have joined forces to take on Binance in arbitration in a bid to recoup their losses.
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