• The Commodity Futures Trading Commission (CFTC) has accused Binance of allowing US-based trading firms to trade crypto derivatives on its international exchange.
• According to the CFTC, Binance knowingly allowed this to happen and gave some of its largest VIP clients advantages in terms of faster trade execution.
• Following the lawsuit filed by the CFTC on Monday, Binance saw net withdrawals of $2.2 billion over the course of seven days.
Accusations from the CFTC
The Commodity Futures Trading Commission (CFTC) has accused Binance of allowing trading firms based in the US to trade crypto derivatives on Binance’s international exchange. According to the regulator, the US firms used offshore entities and various other methods to gain access to Binance.com, which constitutes an obvious circumvention of Binance’s own policy that no Americans are allowed to trade on Binance.com. Furthermore, it is argued that Binance knowingly allowed this to happen and even gave certain VIP clients advantages in terms of faster trade execution times.
Facing these accusations from the CFTC, CEO Changpeng Zhao called them “unexpected and disappointing” while adding that his firm has worked “cooperatively with the CFTC for over two years” He also stated that upon an initial review, “the complaint appears to contain an incomplete recitation of facts” and he does not agree with all the issues alleged in it.
Net Withdrawals Following Lawsuit
Following the lawsuit filed by the CFTC on Monday this week, a tweet from CZ revealed that there was a bit of net outflow as $2.2 billion were withdrawn in 7 days’ time from Binance after news broke about it being sued by regulators due to violation of regulations on derivatives trading ban for US-based investors..
Binance Set Up Separate Exchange for US Traders
To serve US traders legally without having any legal implications, Biance has set up a separate crypto exchange known as “BiananceUS” which functions as a separate crypto exchange complying with all necessary regulations related with trading activities within United States according to Bianance itself .
Biance was accused by Commodities Future Trading Commission (CFTC) for allowing US traders access its international platform which violates its own policies but later responded back saying they have been working cooperatively with CFTC for past two years . Despite allegations ,a huge amount net withdrawal was seen after news about lawsuit spread but since then Bianance has set up separate platform for US traders so they can legally perform their trading activities without getting into any legal trouble .