Binance Offered ‘VIP’ Treatment to These Firms for Liquidity, Fees

Sahana Kiran
Source – Unsplash

The Commodity and Futures Trading Commission’s lawsuit against Binance drew further attention to the industry. While several failed to believe these accusations, the exchange and its founder Changpeng Zhao dismissed the charges. Nevertheless, a few others remained vigilant. Now, three “VIP” clients of the exchange were revealed.

According to a recent report, trading firms Jane Street Group, Tower Research Capital, and Radix Trading were the clients cited in the CFTC lawsuit. Radix Trading is “Trading Firm A” as defined in the lawsuit, while Jane Street and Tower Research are “Trading Firm B” and “Trading Firm C” respectively. Radix was one of the first to be revealed.

The aforementioned “VIP” clients enjoyed perks that the rest of the community couldn’t. For instance, Binance was accused of facilitating lower transaction fees and faster trading services to these clients. This wasn’t all. These clients managed to get “prompt notification of any law enforcement inquiry concerning their account.” Along with these VIP clients, Binance also garnered some profits. These firms provided liquidity and the exchange pocketed revenue from fees.

VIP client Radix employed VPN to access

The CFTC claimed that the whole thing was a component of a plan that “actively facilitated violations of U.S. law” among other things. This allowed Binance to assist American trading companies to avoid Know Your Customer [KYC] compliance requirements.

Binance reportedly gave Radix information on how to reach through a virtual private network to mask its IP address. This further allowed Radix to evade compliance checks.

Benjamin Blander, Radix’s co-founder, recently told the Wall Street Journal that the firm isn’t under investigation of any sort due to its association with Binance. He also noted that Radix had traded on Binance for a number of years using offshore companies and a premier brokerage that gave access to the exchange.