Posted 8 months ago | by Catoshi Nakamoto

The Commodity Futures Trading Commission (CFTC) is reportedly investigating Binance alleging that the exchange was involved with “insider trading” and market manipulation.

AdobeStock 286536398 Editorial Use Only1 scaled CFTC Investigating Binance For Insider Trading As Exchange Hires Former Europol Darkweb Specialist Preparing For Regulation Compliance

According to Bloomberg, the CFTC has expanded its Binance U.S. probe to see whether insider trading and market manipulation has been taking place at the world’s largest digital asset exchange.

CFTC, IRS, And DOJ Investigations Into Binance

Binance was previously being investigated for whether the exchange illegally let Americans use the exchange as Reuters reported. The CFTC probe of the world’s most popular exchange has now expanded to include the discovery of whether or not market manipulation and insider trading occurred at the digital asset marketplace.

The Bloomberg report cites several anonymous sources with knowledge of the CFTC investigation, stating that cryptocurrency viewed upon as a commodity is under the agency’s jurisdiction for derivatives trading in the U.S. However, Binance’s global site, Binance.com, is not legally supposed to offer those services to U.S. residents without approval.

Binance’s problems expand far further than just the U.S. though. In a previous report, Bitboy Crypto covered Binance initially being targeted by the — U.S., UK, Singapore, Thailand, Canada, Japan, India, and even the Cayman Islands where Binance is incorporated. An ongoing list targeting the exchange includes — Italy, Lithuania, Hong Kong, Poland, and Malta, i.e. Binance’s former home before it was kicked out in 2020 by the Malta Financial Services Authority (MFSA). Although Binance doesn’t have an official operation headquarters, and it’s operated in a decentralized manner with no one location being it home. It’s worth mentioning that Singapore was where the company had known offices.

Binance’s CEO Changpeng “CZ” Zhao recently had a moment of clarity expressing that the company needs a “centralized entity to work well with regulators.” While that may help relieve attention that the company doesn’t have a clear headquarters, it’s very doubtful this will help the exchange ward off regulators looking into insider trading claims.

“We have come to realize that we need a centralized entity to work well with regulators,” CZ stated in an interview with the South China Morning Post, adding, the company needs to have “clear records” of stakeholder ownership and risk management.

CZ has not yet confirmed a location where the exchange’s HQ could be located or when Binance would seek to establish the building.

Additionally, Binance has a separate open case with the U.S. regarding an investigation into Binance Holdings Ltd. by the Justice Department (DOJ) and Internal Revenue Service (IRS) which thus far has not been disclosed what that case involves. But it can be assumed that given both the IRS and DOJ involvement it has to do with U.S. citizens committing money laundering using the exchange. Interestingly enough from a previous Bloomberg report, sources told the news agency that the IRS probe is not only targeting Binance users but potentially employees of the company as well.

Binance Bringing In Regulator Friendly Players

Binance International seems to be increasing its expertise in tracking suspicious transactions recently announcing that it has brought on former Europol Darkweb specialist Nils Andersen-Röed to strengthen its investigations and audit team.

“Nils’ appointment strengthens an already strong team of security specialists working hard to make sure Binance remains the most secure crypto ecosystem around,” Binance said in a statement.

“After many years working in law enforcement I am excited to tackle new challenges in the Binance audit and investigations team,” Andersen-Röed said. “Over the years I have learned that simply arresting criminals isn’t enough to combat crime, you also need to take a broader look at the whole ecosystem in which they are operating.” 

As Bitboy Crypto previously reported before the exchange hired Nils, in July, Binance International added Jonathan Farnell, formerly of eToro, as the exchange’s new director of compliance with plans to double its compliance team. Farnell previously headed eToro Money UK as director of compliance, and he served as head of compliance at eToroX.

Here in the U.S. Binance’s affiliate Binance.US just announced Brian Shroder a former Uber executive as its new president and brought aboard a new interim CEO, Joshua Sroge following the resignation of former regulator Brian Brooks who led the company for a few months. Shroder will oversee strategy, execution, fundraising, business and corporate development for Binance.US. As president, Shroder will manage other aspects of the business, including legal, human resources, and product and technology functions, according to a press release.

Amid regulatory scrutiny for the overall international business, Binance.US has also hired a former regulator Manuel Alvarez as its Chief Administrator. Alvarez will report to Sroge the current CEO of Binance.US.

Besides appointing key figures, Binance has further recently announced a mandatory KYC (Know Your Customer) for all users on its exchange, a sign that Binance is shifting its views and business.

It’s important to note that these are just investigations at this point and no evidence of wrong-doing has been presented against the exchange. It’s unclear if the U.S. entity is tied up in the investigation into Binance Holdings Ltd due to CZ’s own involvement as a founder and board member of Binance U.S.

Bitcoin is currently trading at [FIAT: $48,361.55] UP +2.9% in the last 24 hours according to Coingecko at the time of this report.

About Catoshi Nakamoto

c6ea0c3794492f30883e516d39b2597a?s=90&d=blank&r=g CFTC Investigating Binance For Insider Trading As Exchange Hires Former Europol Darkweb Specialist Preparing For Regulation ComplianceActivist/Journalist, former writer - We Are Change, The Mind Unleashed, Coinivore, others. Currently writing for - Activist Post and Bitboy Crypto. Not Right or Left Apolitical. I Care About Truths (CATS.) Cryptocurrency enthusiast, I mined and lost 100+ BTC in 2010-2011. I work with - Bitboy, SoMee, CEEK, Presearch, and W3BT aka FMW Media Group. Friend of mostly everyone who isn't a dick. Just A Cool Cat.