The Binance platform is reportedly under investigation by the Commodity Futures Trading Commission, one of the main financial regulators in the United States. The agency is reportedly investigating whether Binance allowed U.S. investors to use its platform without being authorized to do so.
According to a Bloomberg report published on Friday, which cited unnamed sources, the Commodity Futures Trading Commission (CFTC) is reportedly conducting an investigation into Binance, the popular cryptocurrency exchange platform.
One of the main financial regulators in the United States would thus seek to determine whether Binance has authorized US residents to use derivatives, knowing that the platform is not registered with the agency.
The CFTC considers cryptocurrencies to be commodities and claims jurisdiction over their futures and other derivative products. As such, cryptocurrency trading platforms must meet strict customer protection and oversight requirements in the event that Americans use its services, regardless of where the platforms are based.
Bloomberg’s sources, however, clarified that Binance has not been accused of misconduct and that the CFTC’s investigation may not lead to legal action. Commenting on this rather shaky situation for Binance, its CEO Changpeng Zhao maintained that the company closely follows the rules in the U.S. and has powerful mechanisms in place to prevent its customers from laundering funds.
A danger to the cryptocurrency industry?
This investigation adds to the growing pressure on cryptocurrencies from the United States. A few months ago, the CFTC filed lawsuits against the BitMEX platform for multiple reasons, which greatly crippled the company. Since it has been under regulatory scrutiny, its user base has been steadily declining.
If it turns out that a case against Binance is actually filed, it could impact the entire cryptocurrency industry. As the undisputed market leader, Binance is a behemoth in its industry, and having the CFTC on its back could hurt it.
Getting informed about Binance
Before buying your crypto-currencies by signing up with Binance, it is always recommended to get as much information as possible about the exchange platform. There are several elements to choose the best exchange such as the reassuring aspect, the number of trading fees, the payment methods, and the range of possible transactions. So let’s go over all these points together, starting with the beginning of the Binance adventure in 2017.
The history of Binance
The cryptocurrency exchange platform was founded in 2017 by Changpeng Zhao (often abbreviated “CZ” in the industry), a Chinese émigré to Canada. This computer scientist is interested in both international finance and the cryptocurrency projects that emerged at the turn of the 2010s (Bitcoin was launched on January 3, 2009). He, therefore, combines his two interests, anticipating the contributions that blockchain technology (a collection of all validated transactions) could have for international trading.