accused of proprietary trading

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Stock Photo – has been accused of having internal teams engaged in trading activities for the company’s financial gain. Anonymous sources told the Financial Times that the Singaporean-based exchange operated its own trading and market-making teams.

This revelation comes amid increased regulatory scrutiny of cryptocurrency exchanges, with Binance, another major exchange, recently facing legal action for similar allegations. The Securities and Exchange Commission (SEC) accused Binance’s CEO of being involved in manipulative trading practices to artificially inflate the exchange’s trading volume.

According to The Financial Times, there have been no previous reports of internal trading at since its establishment in 2016. has also refuted the claim, claiming that most of its revenue comes from its application. In this app, acts as the counterparty for transactions and operates strictly as a broker model.

“We have an internal market maker that operates on the exchange and that internal market maker is treated exactly the same as third-party market makers that identically facilitate tight spreads and efficient markets on our platform. This is not a controversial practice,” the company said.

Addressing concerns about potential conflicts of interest, told the Financial Times that its “trading team ensures that is risk neutral by hedging these positions on a number of venues, including the exchange.”

The recent allegations came after the company decided to suspend its services for institutional clients in the U.S. starting from June 21 as it faced increased regulatory challenges posed by the U.S. Securities and Exchange Commission (SEC).

Industry-wide scrutiny

This incident also bears similarities to that faced by Coinbase at the end of last year when rumors circulated about its involvement in proprietary trading.

Coinbase denied these allegations. The company explained that its agency-only platform facilitates client-driven cryptocurrency transactions and does not engage in proprietary trading.

Similarly, the Commodity Futures Trading Commission (CFTC) alleged Binance of undisclosed proprietary trading on its own platform, adding to the accusations made by the SEC.

The CFTC’s complaint revealed that Binance had conducted trades through approximately 300 undisclosed “house accounts” owned by its founder and CEO, Changpeng “CZ” Zhao, and affiliated entities without customer knowledge or disclosure.

Ethical and legal concerns arose due to the lack of transparency as these activities were not disclosed in Binance’s Terms of Use or any publicly available documents.

The CFTC argued that the situation compromised the fairness and integrity of the exchange, with customers unknowingly participating in trades against Binance itself.

Binance reportedly refused to cooperate with the CFTC’s investigation, ignoring subpoenas requesting information about its proprietary trading and related communications.

The CFTC also alleged that Binance had offered commodity derivatives to U.S. customers without proper compliance controls.

Furthermore, Binance was alleged to have neglected the implementation of safeguards to counteract terrorist financing and money laundering. According to the CFTC, Binnace later established compliance controls on its platform but provided instructions for clients to evade them.

“We don’t want to lose all the VIPs which actually contribute to quite a large number of volume. So ideally we would help them facilitate registering companies or moving the trading volume offshore in some way—in a way that we can accept without them being labeled completely U.S. to us,” Zhao allegedly told Binance executives in 2019.

“We do need to let users know that they can change their KYC on and continue to use it. But the message, the message needs to be finessed very carefully because whatever we send will be public. We cannot be held accountable for it.”

Repeatedly under fire

The recent accusation wasn’t a first for the Singaporean-based exchange. Earlier this year, was accused of engaging in “misleading” and “irresponsible” advertising practices, breaching U.K. advertising standards on multiple occasions.

These rulings by the U.K. Advertising Standards Authority (ASA) have led to increased scrutiny of’s promotions in Australia. The exchange has been under a five-year partnership with the Australian Football League (AFL) since January 2022, with the company’s name being promoted at AFL stadiums.

One of the rulings by the ASA revealed that a local advertisement had failed to adequately communicate the risks associated with investing in non-fungible tokens (NFTs) and did not disclose applicable fees.

In response, disputed the ruling, claiming that mentioning fees in the ad was irrelevant and could confuse consumers.

The ASA upheld rulings on two other ads accused of exploiting consumers’ lack of experience or gullibility.

One ad encouraged consumers to “buy bitcoin with a credit card instantly,” without clarifying that taxes might apply to cryptocurrency profits or the risks of investing in cryptocurrency with a credit card.

Another ad promised consumers they could “earn up to 8.5 percent” but failed to provide clear details about calculating the earnings forecast. said that the ads in question were promptly removed once concerns were raised, and they have since strengthened their oversight process. It remains to be seen whether these ads ran in the Australian market.

The Australian Securities and Investments Commission (ASIC) has called for a regulatory framework to safeguard consumers in the cryptocurrency and NFT market. Without specific regulations, ASIC emphasizes that rules against misleading and deceptive conduct still apply to all crypto assets.

ASIC has taken legal action against companies like BPS Financial and Block Earner for alleged misleading and deceptive claims and for offering financial products without the necessary licenses.

Dr. Paul Mazzola, a cryptocurrency expert at the University of Wollongong, argues that the AFL’s partnership with poses a reputational risk for the sporting organization.

He suggests that ASIC could take action if similar misleading advertisements were published in Australia, as long as the advertised crypto assets fall within ASIC’s definitions.

Mazzola recommends updating the rules to explicitly include cryptocurrencies and NFTs, which would send a clear message to the market and crypto exchanges like about the need for careful advertising that provides appropriate warnings about the risks associated with crypto investments.

When approached for comment, the AFL referred to a previous statement made in November, expressing its support for the partnership with The statement was issued after the collapse of FTX, a major cryptocurrency exchange. CEO Kris Marszalek stressed that his company has a strong financial position and should not be compared to FTX.


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