Bloomberg reveals Binance VIP clients from CFTC lawsuit

Companies provided liquidity to the exchange in exchange for favorable trading conditions

06.04.2023 - 13:35

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What’s new? Bloomberg reporters have revealed Binance’s anonymous VIP clients identified as “Trading Firms A, B, and C” in a lawsuit filed by the US Commodity Futures Trading Commission (CFTC) against the exchange. According to the news agency’s sources, they are Radix Trading, Jane Street Group, and Tower Research Capital. The regulator claims that they provided liquidity to the exchange in exchange for favorable trading terms.

News on the Bloomberg website

What else is known? The CFTC accuses the Binance global exchange of providing commodity derivatives trading services to US customers, including VIP companies, from 2019 to the present.

The VIP service involved reduced transaction fees and expedited trading services. Said firms provided liquidity to Binance, and the exchange in return received corresponding revenues from trading fees.

According to the CFTC, the strategy violated US law by helping local trading firms evade customer identification (KYC) standards. For example, Binance allowed it to circumvent restrictions on serving Americans by providing access through a virtual private network to conceal an IP address.

The Commission noted that Binance “prioritized commercial success over regulatory compliance” with US law.

On March 27, Zhao denied the CFTC’s allegations and called the lawsuit “unexpected and disappointing” because Binance had been cooperating with the agency for more than two years.

Since the lawsuit, Binance’s share of the crypto market has dropped from 70% to 54%, according to Kaiko, its lowest share since November 5, 2022.

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