A new report from Washington-based digital currency analytics firm Inca Digital revealed that U.S. derivatives traders continue to make use of international digital currency exchanges—including Binance, Bitfinex, and FTX—despite those exchanges claiming to block U.S. residents. Several base US-based users tweeted and bragged about particularly successful digital currency derivative trades, often backing up this braggadocio with screenshots.
U.S. derivatives might be using international exchanges illegally.
Inca Digital’s report cites 2,164 unique Twitter accounts, of which 372 were U.S.-based, that bragged about particularly successful digital currency derivative trades, often backing up this braggadocio with screenshots. A Wall Street Journal report on the Inca data claimed that these posts likely represented only the tip of the illegal derivatives iceberg. If the report is to be believed, crypto exchanges’ claims to be actively policing their customers’ origin were patently hollow. Some of the U.S. traders used virtual private networks (VPN) to disguise their actual location, while others accessed the forbidden sites simply by lying about their location.
Crypto exchanges did not require their users to give address proofs.
US-based customers were able to use these crypto exchanges simply by lying about their location without the sites requiring proof to support these claims. FTX, for example, didn’t even require its users to supply a phone number that matched the country code for the country in which the customer claimed to be based. FTX, which raised $900 million in its most recent funding round, appears to have prioritized growth at the expense of, well, everything else. Inca Digital shares its data with the U.S. Commodity Futures Trading Commission (CFTC), which has loudly expressed its displeasure with cryptocurrency exchanges offering derivatives products to the US.