US Authorities Investigate Binance For Possible Insider Trading
U.S. officials have opened another investigation on crypto exchange Binance. According to Bloomberg report they are looking into possible insider trading and market manipulation at Binance. The exchange has recently been under fire from regulators all over the world.
CFTC’s Insider Trading Investigations
U.S. officials are investigating whether Binance or its staff profited by taking advantage of its customers. According to Bloomberg, people familiar with the matter who wish to stay anonymous, said that the Commodity Futures Trading Commission investigators (CFTC) have been reaching out to potential witnesses in past weeks.
Binance exchange is one of the largest crypto exchange, with a massive trading operation that gives the exchange a view into millions of transactions. CFTC are questioning whether the firm exploited that access, including by trading on customer orders before executing them.
Binance spokesperson commented:
“At Binance, we have a zero-tolerance policy for insider trading and a strict ethical code related to any type of behavior that could have a negative impact on our customers or industry.”
They also added that Binance’s security team has long-standing guidelines for investigating wrongdoing. Additionally, they hold workers accountable, with employment contract termination being the minimal repercussion.
There has not being a comment from CFTC on the matter, as the investigation is still on-going.
The investigation includes some of the same officials who worked on the regulator’s case against crypto exchange BitMEX.
Last month, BitMEX agreed to pay $100 million in a settlement. The CFTC and the Financial Crimes Enforcement Network accused the exchange of letting U.S. residents trade derivatives. Also that it did not have proper anti-money-laundering controls in place.
Binance And Global Regulatory Issues
The world’s largest crypto exchange has had a number of compliance issues in many countries in past months.
In March that the exchange was under investigation by the U.S. Commodity Futures Trading Commission. The regulator wanted to determine whether cryptocurrency derivatives were bought and sold by US citizens on the Binance platform. Following that in May that the U.S. Justice Department and IRS were also investigating the Group for money laundering.
A number of other countries have demanded that the exchange cease offering services due to a lack of proper licenses. Thailand, U.K., Malaysia, Hong Kong, Italy, Singapore, and South Africa are some of the countries where Binance has faced regulatory issues.
Binance CEO, Changpeng Zhao, wrote in July that there has been a “hyper-focus on regulation when it comes to Binance.” He also highlighted Binance’s policies to prevent insider trading. Binance’s global compliance team and its advisory board have grown 500% since last year, he added, with plans to double their size by the end of 2021.
In August, former IRS investigator, Greg Monahan, joined Binance as its global money laundering reporting officer.
