In 2022, crypto executives and titans of traditional markets like Citadel Securities joined an industry push behind a bill from top lawmakers on the Senate Agriculture Committee that would give the derivatives regulator more turf - at the expense of the SEC.
The CFTC’s regulatory regime is considered less onerous than the SEC’s, so it’s little surprise that the crypto crowd wants to be overseen by the CFTC. Currently it primarily oversees crypto futures and has the ability to take enforcement action if there’s fraud or manipulation in the underlying market, as it has in dozens of crypto cases. The opinions expressed are her own.There have been efforts on Capitol Hill to give the Commodity Futures Trading Commission, the US derivatives watchdog, more power to regulate cryptoassets directly. (The author is a Reuters Breakingviews columnist. According to the report, Teng called the idea he was being groomed to take over from Zhao “premature.” Coindesk reported on May 5 that Teng is the most likely successor to Zhao.
Commodities Futures Trading Commission last month that charged Binance and its founder and CEO Changpeng Zhao with several regulatory violations.īinance appointed Richard Teng to head its regional markets outside of the United States in May. The SEC suit follows a civil enforcement action filed by the U.S. The regulator alleged in a federal court filing on June 5th that Binance violated securities laws, including by commingling customer funds and misleading investors. Securities and Exchange Commission is suing Binance, the world’s largest cryptocurrency exchange by volume. That suggests companies like Binance and Coinbase are fighting for dwindling market share and an increasingly skeptical customer. So the market now may be mostly made up of diehard crypto believers, and they are more likely to use decentralized alternatives that are not exposed to a single company or regulatory framework. Federal Trade Commission in June last year, they have lost $1 billion to fraud, and that was before FTX blew up. Part of the problem may be that retail traders have lost loads of money. According to research firm CCData, Binance has lost a quarter of its market share in the past three months, and its centralized, U.S.-based peer Coinbase Global (COIN.O) is losing ground too. Cryptocurrency users are increasingly spurning corporate-owned exchanges. Commodity Futures Trading Commission filed similar charges against the company.īroadly there are much bigger issues afoot that could be a continued risk to Binance. And the latest issue isn’t the only regulatory threat that Binance is facing. Operating without proper controls in place, as the SEC alleges, instills the opposite.
As Zhao has said himself, exchanges are based on trust. Even if the SEC is out of its jurisdiction, its charges are concerning. Gary Gensler has bent over backward to avoid explicitly saying which digital assets fall under the agency’s purview, and ambiguity has generally been problematic for the industry operators who are trying to continue in the United States. Binance, in a blog post, trotted out a familiar crypto defense: The SEC, which has been vague on how cryptocurrency should be regulated, is beyond its reach. The lawsuit also says that Binance engaged in “wash trading” – where one entity buys and sells the same financial instruments in an effort to inflate volume. customers trade illegally on its exchange. The SEC alleges that Binance knowingly helped U.S. Even if he makes it through this regulatory blowback, crypto trading has moved against him. Zhao has defended the exchange – and the cryptocurrency business – vigorously since his biggest competitor Sam Bankman-Fried was charged with fraud late last year. Securities and Exchange Commission sued the world’s largest cryptocurrency exchange, accusing it of, among other things, artificially inflating trading volumes and failing to properly control U.S. NEW YORK, June 5 (Reuters Breakingviews) - Binance founder Changpeng Zhao doesn’t have much to look forward to.
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