In addition to ongoing regulatory trouble, Binance is now being investigated for allegations of insider trading, according to a Bloomberg article.
The inquiry is being conducted by the Commodity Futures Trading Commission, according to the document, which references unnamed individuals familiar with the case. The CFTC, which deals with fraud and market manipulation, has an expansive vision of its regulatory reach to include Binance and millions of bitcoin, exchanged daily.
Apart from having jurisdiction over commodity trading in the U.S., the CFTC also regulates the American derivatives market. Binance’s worldwide exchange offers crypto trading goods, but its U.S.-based subsidiary does not.
The CFTC is now examining Binance’s potential involvement in unlawful activity, including whether it enabled U.S. citizens to utilize the service. In May, news emerged that the Department of Justice and Internal Revenue Service are investigating the firm’s affairs.
Binance’s 2021 Trouble with Regulations
Concerns voiced by global watchdogs include the allegation that the growth in cryptocurrency’s market dominance, as seen with Binance, enables money laundering and is likely to exacerbate the overall systemic risk. Binance CEO Changpeng Zhao is the project leader, and he is responsible for the many services provided by the platform, which include spot and futures trading, tokenized versions of stocks, and the Binance Coin cryptocurrency.
The FCA, Britain’s financial regulator, has ordered Binance to stop performing any regulated activity in the UK. Binance has been accused of selling securities tokens and Germany’s financial authorities has determined that it has violated Japanese legislation. According to Bloomberg News, Binance has been pursued by US authorities including the Commodity Futures Trading Commission and the Department of Justice.
In order to avoid regulatory pressure, Binance has limited some services, including as highly leveraged positions and cryptocurrency trading. The exchange has increased its compliance team members to help reduce any problems.
The FCA, Britain’s financial authority, has given Binance a penalty for being a regulated entity. Binance may face penalties from regulators, since the German financial authority said that the company’s business in Japan was unlawful. According to Bloomberg News, Binance has also been targeted by the US Department of Justice, the Commodity Futures Trading Commission, and the Department of Justice.