No easy get going for world’s biggest crypto firm Binance as it hasn’t been able to get over with its ongoing tussle with the worldwide regulators that a new, but relatively bigger problem, has surfaced. This time the issue is not one which is with regard to regulatory compliance instead the issue involves accusations of “market manipulations” raised by regulators of the US in which they claim they are probing an alleged active involvement of Binance. The investors on the inquiry are the major US Government functionaries and include the Department of Justice, national tax collection authority Internal Revenue Service as well as Commodity Futures Trading Commission.
There are allegations of “insider trading” against Binance which haven’t been probed by anyone until now. Apparently, the allegations of “market manipulation” were leveled by three major regulators/departments of the US namely DOJ, IRS and CFTC. Now the investigation has been re-opened and all the three regulators/departments have taken over the roles of investigators.
According to IRS, DOJ and CFTC, they are assuming that either Binance or some people inside Binance had made profits by inside trading. Insider trading is illegal under the US law and can only be done by disadvantaging customers for the advantage of the service provider. However, so far there are only allegations that evidently require concrete evidence otherwise Binance cannot be held responsible. In an attempt to prove the allegations, all the three authorities have launched a full-scale investigation in the matter.
Having come to know of the inquiry, Binance has made a statement through its global in-charge, Chengpeng Zhao, Binance’s CEO. According to Zhao, Binance has never nor will it ever encourage practices of “insider trading”. Under the very policies and constitution of the firm, such type of practices are not only discouraged but also prohibited. He further said that in the absence of any credible evidence, accusations should not have been made against Binance. He claimed that the accusations are damaging the business, reputation and goodwill of his company.
Meanwhile, CFTC has started to proceed with the investigation and it has been confirmed also that CFTC is establishing contacts with prospective witnesses. There is also a rumor that CFTC is also inquiring about Binance granting access to US investors to crypto products involving Bitcoins. Since Binance isn’t headquartered in the US nor is it registered with CFCT, therefore, Binance cannot offer products involving BTCs in the US.
On the other hand, there are two criminal investigations launched against Binance previously by IRS and DOJ. These two investigations involved accusations of tax avoidance and laundering of public money against Binance. However, the accusations were found to be untrue and both the inquiries were dropped eventually without any consequent action.
This time Binance has to deal with three regulators simultaneously. Hence, a difficult scenario in which nobody would want to be in Binance’s shoes.
