Top-Ranked Crypto Exchange Binance Investigated By Feds Over U.S. Trading Activity

Top-Ranked Crypto Exchange Binance Investigated By Feds Over U.S. Trading Activity

Binance investigated
Top-Ranked Crypto Exchange Binance Investigated By Feds Over U.S. Trading Activity. Image: Pexels

Binance, the largest cryptocurrency exchange by market capitalization ($41.054 billion), is being investigated by the U.S. government for allegedly letting U.S. traders place bets that violate the country’s securities rules, Decrypt reported.

Buying and selling derivatives in the U.S. is regulated by the Commodity Futures Trading Commission. Binance is not registered with the CFTC and has an office in Singapore but claims to lack a single corporate headquarters. The company has reportedly not been accused of misconduct, according to Bloomberg. The investigation may not lead to enforcement action, according to people close to the matter.

It doesn’t matter where crypto exchanges are based. If U.S. residents are trading on them, crypto platforms face strict customer protection and oversight demands. The CFTC considers virtual currencies such as bitcoin and ether to be commodities and claims jurisdiction over their futures and other derivatives.

“The scrutiny is the latest sign that market watchdogs may thwart the crypto industry’s ambitions of becoming more mainstream for U.S. investors,” according to Bloomberg.

Binance operates a separate North American entity called Binance.US with a limited offering of trading products. It’s registered with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, Binance co-founder and CEO Changpeng Zhao told Bloomberg.

Zhao tweeted today in what may have been a response to the breaking news about the investigation: “It’s not a bull market without some FUD.”


A Twitter user replied, “I just saw the news… I wonder when USA will stop seeing as bad everything crypto related. I never understood the need of governments to control everything, specially how people use their money. I know you guys will emerge victorious like always!”

Another Twitter user compared the current environment of fear, uncertainty and doubt (FUD) to 2017, and how it ended well for crypto: “2017 was nonstop FUD but crypto kept going higher. :)”.

U.S. crypto regulators are busy fighting high-profile battles. The federal government and CFTC have brought criminal charges against Arthur Hayes, the Black-owner of fintech company BitMEX, a leading bitcoin exchange.

Listen to GHOGH with Jamarlin Martin | Episode 73: Jamarlin Martin Jamarlin makes the case for why this is a multi-factor rebellion vs. just protests about George Floyd. He discusses the Democratic Party’s sneaky relationship with the police in cities and states under Dem control, and why Joe Biden is a cop and the Steve Jobs of mass incarceration.

And the U.S. Securities and Exchange Commission is suing Ripple Labs, the company behind the XRP coin, its co-founder Christian Larsen and CEO Brad Garlinghouse for allegedly holding an unregistered securities sale that raised more than $1.3 billion.

Hong Kong-based BitMEX is one of the world’s biggest cryptocurrency trading exchanges and has claimed that it processes more than $1.7 billion in daily derivatives transactions.

Less than a month after her January confirmation as U.S. Treasury Secretary, Janet Yellen described bitcoin as a “highly speculative asset” that is extremely inefficient for transactions. She was speaking at a New York Times event.