Binance Holdings Ltd. is being investigated by the Commodity Futures Trading Commission (CFTC) over concerns that US citizens, according to a Bloomberg Report.
“The CFTC is trying to determine whether Binance, which is not registered with the agency, has allowed US citizens to buy and sell derivatives that are being overseen by the regulator.” Bloomberg reported. “Binance, which has an office in Singapore but no corporate headquarters, has not been charged with any wrongdoing and the investigation may not result in an enforcement action.”
Binance operates a separate North American entity called Binance.US. This North American company is limited in terms of the trading products it can offer in comparison and is registered with the U.S. Treasury Department for Financial Crime, said Binance co-founder Changpeng Zhao Bloomberg.
However, this investigation is yet another example of the American government’s increasing scrutiny over the exchange of cryptocurrencies.
“The CFTC has already sued BitMEX for not registering as a broker. The exchange’s market share has declined as it has been subject to regulatory scrutiny. Coinbase Global Inc., the U.S. largest crypto exchange, also announced last month that it was responding to a long-range CFTC probe. ” Bloomberg detailed.
As the cryptocurrency industry grows, so does the attention it attracts, especially from regulators looking to restrict illegal trading and financial activities. If cryptocurrency companies in the US are to keep growing, they will need to find ways to work with regulators who are keeping an eye on financial activity within the country.
“Binance said it never commented on its communications with regulators, adding that the company is committed to complying with the rules,” he said Bloomberg Report.