US continues to haunt Binance as investigations expand into insider trading

Karthik Subramanian

Binance, the embattled crypto exchange that has been at loggerheads with various regulators around the world, is now being investigated for insider trading and market manipulation.


The exchange launched right at the beginning of the crypto trading boom and quickly expanded into many countries with scant regard for compliance and regulations. At that time, the regulations surrounding crypto were pretty much nil and Binance used it to its advantage to expand very quickly with no setup or presence in most of the countries that it operated in. But that seems to have caught up with it now as the regulators in the US and around the world have started to keep a very strict and watchful eye on the crypto industry as they now finally realize that the industry is here to stay.

The investigation from the SEC, initially, centered around whether the exchange allowed the citizens of the US to trade cryptos and securities at the exchange. If proved, then this would be wrong as Binance does not have a license to allow this in the US. The current review is by the Commodity Futures Trading Commission and other government watchdogs which are seeing whether the access that Binance employees had on trading data, which includes access to view millions of trades made by users, was unfairly used by them to trade on these positions or take advantage of the same.

Though no charges have been made on Binance yet, ever since the investigations began, it is yet another story in the long-running saga where Binance has been taken to task by regulators and has been forced to shut shop in many countries like the UK, Malaysia, Hong Kong, etc due to the lack of licensing and compliance. Users have also been warned by the regulators to stay away from Binance to ensure that their funds are safe.

Binance, on its part, has been desperately trying to save itself from this mess by appointing CEOs for each country that it is looking to operate it and trying to set up a structure that would keep the regulators happy and also by bringing in staff who are highly experienced with regulations, as part of their leadership team to enhance the image of the exchange. Whether this would be enough for it to save face and continue to remain as one of the biggest crypto exchanges is something that only time will tell.

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