• The Wall Street Journal reported that some of Binance.US‘ first cryptocurrency trades were conducted internally and constituted wash trading, according to an internal memo from CEO Changpeng Zhao.
• The SEC’s ongoing case against the company alleges that Binance.US inflated trading volumes through accounts at companies controlled by Zhao such as Sigma Chain.
• Wash trading between Sigma Chain accounts and executive accounts accounted for 70% of one cryptocurrency’s trading volume, according to the SEC allegations.
Allegations of Wash Trading at Binance.US
The Wall Street Journal reported on July 24th that some of Binance US‘ first cryptocurrency trades were conducted internally and constituted wash trading, based on an internal memo from CEO Changpeng Zhao. The U.S Securities and Exchange Commission (SEC) is also pursuing a case against the company alleging that Binance US had inflated its trading volumes through accounts at companies controlled by Zhao which included Sigma Chain. According to the SEC’s allegations, wash trading between Sigma Chain accounts and executive accounts accounted for 70% of one cryptocurrency’s total trading volume.
Binance Denies Wrongdoing
In response to the WSJ’s report, Binance denied any wrongdoing in regards to the alleged wash trades on their platform. However, due to the SEC’s ongoing investigation into the matter they have yet to comment further on whether or not these allegations are true or false.
SEC Investigating Wash Trading Allegations
The SEC is currently investigating these claims of illegal activity involving wash trades within Binance US‘ platform during its early days of operation back in 2019 when $70,000 worth of Bitcoin was reportedly traded over its opening hour alone. It is believed by many that if these accusations are proven true then it could lead to significant legal repercussions for both Binance itself as well as those responsible for engaging in this kind of activity within its system – including possibly Changpeng Zhao himself should he be found guilty in any way shape or form related to this matter.
What Does This Mean For Crypto?
This news has been met with mixed reactions from many crypto users who fear that this could set a dangerous precedent for other exchanges around the world if it turns out that these accusations are indeed accurate and punishable under law – leading some traders to question just how safe their funds really are when investing online through platforms like Binance US going forward into 2021 and beyond?
At this time it remains unclear as to what kind of outcome will result from this ongoing investigation but one thing remains certain: if found guilty then there will surely be consequences for those involved regardless of their involvement directly or indirectly with this scandal- potentially setting a new standard for what is considered acceptable behaviour when dealing with cryptocurrencies online moving forward into 2021 and beyond!