Binance faces insider trading allegations as the US CFTC launches an investigation, revealed by Bloomberg report. The CFTC has filed a lawsuit against Binance and its CEO Changpeng Zhao for trading violations. The case is being heard in the US District Court for the Northern District of Illinois.
According to an ongoing investigation that began in 2021, CFTC claims that Binance violated regulatory requirements. In February, Binance admitted that it expected regulatory consequences in the US and was already in talks with regulators to address any concerns.
Aside from the CFTC, Binance is also facing probes from the Internal Revenue Service and federal prosecutors. The issue is regarding its compliance with Anti-Money Laundering regulations. Additionally, the Securities and Exchange Commission is investigating whether Binance allowed U.S. traders to access unregistered securities.
Binance also faces regulatory problems outside the US. In June, the UK Financial Conduct Authority issued a warning about Binance Markets Limited, which Binance had acquired and renamed with hopes to become a UK-only exchange. In July, the Cayman Islands Monetary Authority said that the company wasn’t authorized as a crypto exchange on the island. Binance responded that it doesn’t run a crypto exchange out of the Cayman Islands, but has entities there performing activities that are permitted by law and unrelated to crypto trading.
Despite multiple allegations, Changpeng Zhao is committed “to keep 2023 simple”. In his pinned tweet, he emphasizes the need for education, compliance, and promoting excellent products and services. And lastly, he urges his followers to “ignore FUD, fake news, attacks, etc.”.
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