CFTC delves into Binance’s insider trading conduct

U.S. Commodity Futures Trading Commission (CFTC) sharpens its regulatory gaze as it initiated a condensed investigation into cryptocurrency trading platform Binance Holdings Ltd. for probable crypto exchange abuse for insider trading and market manipulation, according to Bloomberg. 

It seems that even though not everyone can stand its probing scrutiny, the U.S. is feeding its recently found power over tech companies by initiating its latest investigation into Binance, following concerns of the platform’s servers’ location and if the U.S. has any power to impose its authority on the case.

Bloomberg reported on Friday that CFTC watchdogs have been searching for probable witnesses to provide information concerning Binance’s behavior in the U.S. and whether it allows the country’s residents to buy and sell derivatives linked to Bitcoin and other cryptocurrencies.

It is worth highlighting the intensity of the CFTC’s investigation lies with the fact that Binance’s prohibition from conducting any business in the U.S. since it is not registered with the country.

In its defense, the trading platform released a statement addressing the issue by emphasizing the value it holds for its unthreatened saintly guidelines and its customers.   

“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,” Binance spokesman stated.

“Binance’s security team has long-standing guidelines for investigating wrongdoing and holding workers accountable, with termination being the minimal repercussion,” the spokesperson told Bloomberg.

The Commission’s representative has refused to comment on the matter so far.

This isn’t the first time the CFTC launches a thorough examination into cryptocurrency, specifically the sales of derivatives connected to cryptocurrency.

As Washington sets its focus on cryptocurrency’s exponential growth and examines its behavior, the Justice Department and Internal Revenue Service unleashed a criminal investigation into whether Binance has been an accomplice in money laundering and tax evasion schemes.

The Justice Department and the CFTC have been studying the platform’s moves for months as both worryingly observe its market behavior concerning links to unlawful conduct, as crypto firms are deviating towards traditional financial services without preserving their consumers’ interest.

If the CFTC’s concerns are in place, then the absence of consumer protections, in addition to regulations, might potentially harm users signing up to safeguard their valuable investments by placing their trust in the hands of the Chinese platform and a multitude of crypto exchange firms.