Binance says Zero-Tolerance Policy for Insider Trading on CFTC’s Market Manipulation Investigation
US officials are investigating Binance Holdings for possible insider trading and market manipulation, reported Bloomberg this week, citing people with knowledge of the matter.
The leading cryptocurrency exchange, which has been facing increased regulatory scrutiny globally, is now being examined by Commodity Futures Trading Commission (CFTC) which has been reaching out to potential witnesses.
According to the report, authorities are looking into whether the exchange or its staff profited from its customers.
It further noted that Binance had not been accused of any wrongdoing, and the investigation may not even lead to any official action.
The Binance team, in its defense, said that it doesn't tolerate insider trading, and its security team has established procedures for investigating and holding people accountable involved in similar behaviors.
“At Binance, we have a zero-tolerance policy for insider trading and a strict ethical code related to any type of behavior that could have a negative impact on our customers or industry,” said the exchange in a statement.
CFTC was already reviewing Binance regarding if it let US residents buy and sell derivatives linked to crypto assets and is seeking the information as part of this inquiry.
The agency has sought internal Binance data and communications and asked potential witnesses about the location of data servers.
“Binance hasn't been accused of any wrongdoing yet. (very typical of CFTC). CFTC trying to get the servers location to get a foothold since previous cases were dismissed based on a lack of jurisdictional evidence,” said trader Hsaka.
According to the report, some of the same officials involved in the regulator's case against BitMEX are investigating Binance. Last month, BitMEX agreed to pay $100 million in a settlement with the CFTC and Financial Crimes Enforcement Network (FinCEN) without admitting or denying the allegations.
In the US, the Justice Department and Internal Revenue Service have also launched criminal probes into Binance regarding whether it has been a channel for money laundering and tax evasion and have been examining the exchange for months.