![]() The CFTC’s mission is to “protect the public from fraudulent, manipulative and abusive practices relating to the sale of commodity and financial futures and options, and to promote open, competitive and financially sound futures and options markets”. If US regulators tighten their grip on crypto companies, these outflows could continue, causing major players like Binance to focus on other jurisdictions. ![]() Investors reportedly pulled US$1.6bn (£1.3bn) out of Binance within days of the CFTC announcing its charges. So, this allegation – not only against a crypto giant but against a company from an outspoken industry advocate – has caused further turmoil in a market that has already faced several crises over the past year. Binance saw its market share increase after the collapse of FTX. ![]() Upon preliminary review, the complaint appears to contain an incomplete statement of facts, and we do not agree with the characterization of several of the issues alleged in the complaint.ĬZ’s tweets last year arguably contributed to the downfall of FTX, one of his company’s main rivals. Promising a full response in due course, he said: He also tweeted a link to His initial reaction to the recent CFTC allegations, which he called “unexpected and disappointing”. CZ is an outspoken supporter of cryptocurrencies and regularly tweets about the industry and his company. People visit Binance approximately 15 million times a week to trade over 300 cryptocurrencies offered in over 1,600 different markets. The regulator pointed to the chat messages as evidence of CZ and SIM’s knowledge of various criminal groups using the exchange. They are alleged to have taken steps in violation of US laws, including instructing US-based “VIP customers” to open Binance accounts in the names of shell companies. The CFTC has also brought charges against the founder and CEO of Binance, Changpeng Zhao (known as CZ), and Samuel Lim, the former chief compliance officer. It added that Binance has prioritized commercial success over regulatory compliance. The CFTC lawsuit alleges that Binance violated US derivatives laws by providing its derivatives trading services to US customers without registering with the appropriate market regulators. This indicates how regulators – especially in the US – are expected to crack down on the cryptocurrency industry. But this particular case involves a regulator that does not directly oversee cryptocurrencies. This is not the first time a cryptocurrency exchange has been charged by the regulator. The world’s largest cryptocurrency exchange, Binance, has been sued by the US regulator Commodity Futures Trading Commission (CFTC). The University of Reading provides funding as a member of The Conversation UK. not disclosed.Ĭardiff University provides funding as a founding partner of The Conversation UK. Hossein Jahanshahlu does not work for, consult, own shares in, or receive funding from any company or organization that would benefit from this article, and has disclaimed any relevant affiliations beyond his academic appointment. Professor of Finance and Financial Technology, ICMA Centre, Henley Business School, University of ReadingĪssistant Professor in Finance, Cardiff UniversityĪndrew Urquhart owns some cryptocurrencies.
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