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US probe into Binance extends to include insider trading

The US probe into Binance, one of world’s largest cryptocurrency exchange, have reportedly been extended, with authorities seeking evidence pointing towards market manipulation and insider trading. This development could result in many other crypto firms being subjected to regulatory scrutiny, should the results of this probe hold Binance accountable. While the company hasn’t been accused of wrongdoing per say, regulators apparently have reason to believe that the claims made by some potential witnesses about the location of Binance servers, is true.

Possibility of Malpractice

US officials have been looking into the possibility of Binance employees having been indulging in activities to exploit their customers. People who are directly involved in the case will be examined by investigators from the Commodity Futures Trading Commission.

The Commission has already been carrying out an investigation into the sales of derivatives by Binance that are linked to crypto. The aim is to look for proof in the form of internal data to suggest that Binance may be selling derivatives to customers in America, which is against the regulations that forbid such sales without prior registration. Meanwhile, the Internal Revenue Service and Justice Department is also looking into the possibility of money laundering.

Exploiting Customers?

This comes even as there have been concerns that Binance has been exploiting its access to transactions by its customers, to trade orders without previously having executed them. The company is involved in overseeing a vast trading business, having its customers purchase and sell crypto worth billions of dollars on its platform.

US probe Binance extended insider trading

Image Credits: News18

Binance’s spokesperson has expressed the firm’s stance on the matter, saying that they have a “zero-tolerance” policy when it comes to malpractices like insider trading, adding that they have also put in a place a moral code, with the minimum consequence being suspension. Moreover, there also exists intricate rules pertaining to the identification of corrupt practices and their prevention.

Nevertheless, the fact that the US probe into Binance has been extended to also include insider trading, doesn’t necessarily equal to any impeding penalization or legal action, since it is said that both, the Commission and the Justice Department have been looking into the cryptocurrency exchange for months, without any solid action being taken against the company as yet.

One of Many

Binance is only one of the many crypto firms that have been having a hard time dealing with the regulatory eye on them. US officials are concerned about how consumers might be affected owing to the scarcity of legislations to regulate the sector.


Source: Bloomberg



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