Binance Holdings Ltd. is being investigated by the Commodity Futures Trading Commission (CFTC) over concerns that United States citizens utilized trading services barred to them, according to a Bloomberg report.
“The CFTC is seeking to determine whether Binance, which isn’t registered with the agency, permitted U.S. residents to buy and sell derivatives that the regulator polices,” Bloomberg reported. “Binance, which has an office in Singapore but says it lacks a single corporate headquarters, hasn’t been accused of misconduct and the investigation may not lead to an enforcement action.”
Binance operates a separate North American entity called Binance.US. This North American entity is limited in the trading products it can offer compared and is registered with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, Binance cofunder Changpeng Zhao told Bloomberg.
But this investigation is another example of increasing scrutiny from the American government in regards to cryptocurrency exchanges.
“The CFTC has already sued BitMEX for failing to register as a broker, with the exchange’s market share declining since it became a target of regulatory scrutiny. Coinbase Global Inc., the U.S.’s biggest crypto exchange, also disclosed last month that it’s responding to a wide-ranging CFTC probe,” Bloomberg detailed.
As the cryptocurrency industry grows, so does the attention it attracts, especially from regulators looking to curtail illegal trading and financial activity. If cryptocurrency businesses desire to continue growth in the United States, they will have to find ways to cooperate with the regulating entities that keep a close eye on the financial activities within the nation.
“Binance said that it never comments on its communications with regulators, while adding that the company is committed to complying with rules,” according to the Bloomberg report.