The SEC Shuts Down 1Broker Crypto Exchange, will Binance or BitMEX be the Next?
Yesterday, three U.S. agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the Federal Bureau of Investigation (FBI) have taken actions to crackdown on cryptocurrecny exchange 1Broker.
According to an announcement launched by the SEC, the Marshall Islands-based securities dealer 1Broker has involved in a bitcoin-based security swap scheme which violates the federal law, they decided to shut down the exchange.
On the same day, the CFTC filed a civil enforcement action against 1Broker. They stating that:
“The CFTC’s complaint charges the defendants with engaging in unlawful retail commodity transactions, failing to register as a Futures Commission Merchant (FCM), and supervisory violations for failing to implement procedures to prevent money laundering as required under federal laws and regulations.”
Meanwhile, the FBI has seized 1Broker.com and claimed that the firm “operating as an unregistered broker/dealer of securities” and “operating as an unregistered futures commission merchant” which has violated money laundering law.
The issue causes a big stir in the crypto community and causes fierce debate on Twitter. Users may lost millions of dollars in funds, and some analysts pessimistic suggest that the major crypto exchanges Binance and BitMEX will be the next.
Some cypto lovers demonstrated their view point on Twitter. They argues that, Binance and BitMEX haven’t complied with US laws. Although they claimed that they won’t accept US citizen users, but actually, these two exchanges still knowingly profiting from US citizens trading on their platforms.
When a exchange virtually accepts American citizens , it needs to comply with the US laws and regulations, otherwise, the US financial watchdogs may have the right to shut it down.
Although Binance and BitMEX have prohibited American IP addresses from participating in their platforms, the SEC won’t let them go easily as they have made billions of dollars from US citizens.