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Binance Under CFTC Investigating Over Derivate Trading

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US Commodity Futures Trading Commission (CFTC) began investigating Binance activities due to concerns that it allows US citizens to trade cryptocurrency derivatives in violation of the law.

CFTC is trying to find out if Binance allowed US residents to buy and sell cryptocurrency derivatives. If this is true, then Binance violates US laws since Binance is not registered with the CFTC, the agency said.

Binance CEO Changpeng Zhao said the exchange does not have an official headquarters in the US, so the investigation will not lead to enforcement action. The CFTC treats Bitcoin and Ethereum as exchange commodities, which is why futures contracts are under the jurisdiction of the CFTC. Platforms offering such products to US citizens are required to comply with strict regulatory requirements, regardless of their location.

Zhao stated that the exchange did not take any action that violates US law. Zhao said that he usually does not comment on interactions with regulators. According to him, this investigation does not mean that the department is trying to bring charges against the exchange.

The Binance founder suggested that his competitors might bribe or pressure journalists to publish abusive material containing false information. Zhao cited the example of Forbes, which last year published an article about the “Tai Chi organization” against Binance. Binance later sued Forbes but dropped the claim last month.

Zhao added that Binance takes regulatory compliance seriously and is implementing appropriate measures to combat money laundering. The exchange will continue to interact with international regulatory bodies to improve compliance with industry standards.

The head of Binance said that the exchange does not allow American traders from accessing its main website, and also uses advanced technologies to detect suspicious activities. However, users can always find clever ways to bypass restrictions. Zhao said regulators are enforcing too strict rules for cryptocurrency firms.

After this news, Bitcoin fell to $54,960, while the value of BNB fell to $247.5. Zhao tweeted that Fear, Uncertainty, and Doubt (FUD) is common in a bull market. Zhao urged users not to panic.

 

US regulators are stepping up measures against the cryptocurrency industry. In 2019, the BitMEX trading platform also came under close scrutiny from the CFTC. Last fall, Coinbase management reported that during the first half of 2020, the exchange received more than 1,900 queries from law enforcement agencies, including the CFTC.

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Disclaimer

The content is for informational purposes only and may include the author’s personal opinion, and does not necessarily reflect the opinion of TheCryptoBasic. All Financial investments, including crypto, carry significant risk, so always do your complete research before investing. Never invest money you cannot afford to lose; the author or the publication does not hold any responsibility for your financial loss or gains.

Albert
Albert Brownhttps://thecryptobasic.com/
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.

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