Binance Faces Scrutiny: The biggest cryptocurrency market in the world, Binance, has come under review after a news organization claimed that Chinese users traded $90 billion worth of cryptocurrency assets in just one month. What’s surprising is that selling these kinds of support has been banned in China since 2021, making these deals criminal.
On Tuesday, information showed that China had become Binance’s most important market, making up an impressive 20% of all trade action worldwide. But this number doesn’t include deals made by influential people, which gives the situation an air of mystery. The story didn’t say which month these deals occurred, which is unfortunate.
Binance was founded in China, but 2017 it had to move out of mainland China because the government was cracking down. At the moment, Hong Kong is where the Bitcoin market is based.
When asked, a Binance employee explained that the Binance.com website is banned in China, so people there can’t use it. Reuters talked with the spokesman some more to get more information.
As Binance’s fame grows, U.S. regulators like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) are closely monitoring the exchange as part of their jobs.
In a recent court case, the CFTC said Binance was running an illegal exchange and had made up a compliance program. The SEC also filed a lawsuit against Binance’s CEO, Changpeng Zhao, accusing him of misleading investors about the effectiveness of market surveillance controls, inflating trading volumes, withdrawing customer funds without their permission, letting U.S. customers use the site when they shouldn’t have, and sending customer funds somewhere else.
A Reuters story from December showed that the U.S. Department of Justice is looking into whether these trades broke sanctions and involved illegal money transfers. This makes things even more complicated. As the probes go on, the future of Binance is still unclear, and the court spotlight is getting stronger.
Our Reader’s Queries
Is Binance under investigation?
Binance Holdings Limited, the operator of the world’s biggest cryptocurrency exchange, Binance.com, has pleaded guilty and will pay more than $4 billion to settle the Justice Department’s investigation into Bank Secrecy Act (BSA) violations and failure to register as a money service business.
What are the accusations against Binance?
According to the U.S., Binance has facilitated transactions carried out by operators of “illicit mixing services” that aim to conceal the origin of cryptocurrency funds. The exchange has also been accused of laundering the proceeds of darknet market transactions, hacks, ransomware, and scams.
What is the US action against Binance?
On Monday, the U.S. Commodity Futures Trading Commission announced that a court has issued an order against Binance, a cryptocurrency exchange, and its former CEO, Changpeng Zhao. The court has approved billions of dollars in fines for money laundering. This decision comes after the agency brought a case against the exchange.
What is the criticism of Binance?
Binance incurs both transaction and trading fees, and users have reported technical difficulties when utilizing the NFT section.