3 min read
Crypto exchange Binance is being investigated by the US Commodity Trading Futures Commission (CTFC) for allegedly allowing American traders to place wages that go against US regulations. People familiar with the matter have reportedly preferred not to be identified.
Binance is not registered with the CTFC, but the CTFC regulates the buying and selling of derivatives in the United States. The organization is concerned that Binance has allowed this to occur without notifying the CTFC. However, Binance has reportedly not been accused of misconduct, and people close to the matter suggest the probe may not lead to enforcement action.
According to the CTFC, cryptocurrencies like Bitcoin are commodities. As a result, the CTFC believes it should have regulatory power over these assets, and so any trading that involves their futures or derivatives would need to be overseen directly by the regulatory agency.
In a tweet seemingly directed at the breaking news, Binance CEO Changpeng Zhao responded, saying, "It's not a bull market without some FUD."
Binance blocks US residents from its website, and maintains a separate site that is compliant with US regulations, Binance.US, for traders based in the United States.
The investigation comes at a time when onlookers question the role of regulators in the crypto industry.
At the time of writing, the SEC is embroiled in a regulatory battle with Ripple, the company behind the XRP cryptocurrency. Meanwhile, BitMEX CEO Arthur Hayes is also in the midst of negotiating with US authorities following BitMEX's alleged anti-money laundering shortcomings.
In addition, the Secretary of the Treasury Janet Yellen has aired views about Bitcoin that have not pleased the majority of the crypto industry. She described the flagship cryptocurrency as a "highly speculative asset," and raised concerns about its links with illicit finance.
However, there are also positive signs for crypto enthusiasts. Founder of Skybridge Capital and former White House Communications Director, Anthony Scaramucci, believes the United States might see a Bitcoin ETF establish itself by the end of the year. What's more, President Biden's pick to lead the Securities and Exchange Commission (SEC), Gary Gensler, already has some exposure to blockchain technology after having taught on the subject at MIT.
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