Compliance Puzzle: Coinbase Halts Lending Product, FTX Launches Regulated Headquarters in The Bahamas, Binance Rumored to be Under Investigation for Insider Trading

Major international exchanges are implementing various measures and strategies to comply with regulations. Binance announced plans to establish a headquarters that meets regulatory expectations, while FTX acquired the U.S. exchange LedgerX, which holds a derivatives license... In recent developments, Coinbase announced it will not promote lending products, FTX announced the establishment of a subsidiary regulated by the Securities Commission of The Bahamas, and there are rumors that Binance is facing trouble with the CFTC.

Coinbase to Halt Lending Product

On the 8th, it was reported that the U.S. Securities and Exchange Commission (SEC) had set its sights on the lending product "Coinbase Lend," claiming the product falls under the category of securities, and warning that if the product undergoes further updates, Coinbase could face legal action.

On the 17th, Coinbase stated that it is actively seeking a clearer regulatory framework for the industry and has decided not to launch a USDC interest-bearing product, despite hundreds of thousands of people globally having pre-registered for it, and will instead pause the initiative.

FTX Subsidiary Regulated by the Bahamas SEC

FTX announced on the 20th that its subsidiary registered in the Bahamas, FTX Digital Markets, is regulated by the Securities Commission of the Caribbean island nation, in accordance with the comprehensive digital asset regulatory framework known as the DARE Act. FTX believes this will help expand its digital business scope and allow the platform to grow in a compliant manner.

Founder SBF stated that FTX Digital Markets will serve as FTX's headquarters, and appointed the former head of OTC at Alameda Research as the CEO of the company.

Prior to this announcement by FTX, Binance had just announced on the 17th that they would be establishing a headquarters in response to compliance requirements.

Bloomberg: Binance Under CFTC Investigation for Insider Trading

On Thursday the 18th, Binance announced that they have hired European law enforcement investigator Nils Andersen-Röed to lead their audit and investigation team, demonstrating their commitment to combating illicit activities. Bloomberg also reported on the same day that according to sources, the U.S. Commodity Futures Trading Commission (CFTC) is investigating Binance for possible insider trading and market manipulation; sources indicated that the CFTC is looking into whether Binance offered derivative services to U.S. residents without authorization and is attempting to collaborate internationally to obtain communication records between Binance and U.S. customers.

Major Platforms Affected by Stock and Crypto Market Downturn

At 9 a.m. on the 21st, Coinbase's stock closed at 236.53, down 3.53%. BNB dropped 12% in 24 hours to $357, compared to a 1.8% drop in Bitcoin; FTT fell 9% in 24 hours to $55, compared to a 3.6% increase in Bitcoin.