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Binance U.S. Under Investigation from the SEC Over Trading Affiliates -Breaking

by Mike Robinson

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U.S. Binance SEC Under Investigation Over Trading Affiliates

Once again, the world’s largest cryptocurrency exchange, Binance, has come under regulatory scrutiny. The Securities and Exchange Commission (SEC), is now investigating Binance’s U.S. division for its relationships with two market-makers affiliates.

According to the report the CEO Binance’s Changpeng Zhao is the owner of the two businesses, Sigma Chain AG & Merit Peak Ltd. According to the report, corporate documents showing CZ ties with both companies are shown in this document.

SEC investigates Binance. US Ties With Sigma and Merit Peak

The price volatility is reduced by both trading companies buying and selling crypto on Binance.US. The small price differences between the ask and bid prices help to decrease volatility. Market makers also profit.

Although market-making is common in traditional finance as well as the crypto industry, Binance.US doesn’t name its market makers partners.

Binance U.S. is now required to provide information about the affiliate trading businesses. The regulatory agency has opened an investigation into whether the two affiliate trading firms received preferential treatment on the exchange’s end in regards to speed and access.

According to sources familiar with the matter, Binance.US also revealed its connections to trading firms to customers. For now, however, the SEC isn’t clear on how it might proceed with any enforcement measures.

Flipside

  • Binance spokesperson said the company does not have to release information about investors but that it would be open to sharing this information with regulatory agencies.

Why you should care

This investigation primarily aims to resolve the complex relationship between Changpeng Zhao & the two market-makers.

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