Jane Street, Tower Research, and Radix: Binance’s ‘VIP’ Clients in CFTC Suit, as Reported

Jane Street, Tower Research, and Radix: Binance's 'VIP' Clients in CFTC Suit, as Reported
Trading Firms Identified as Binance’s ‘VIP’ Clients in CFTC Lawsuit

Trading Firms Identified as Binance’s ‘VIP’ Clients in CFTC Lawsuit

Trading firms Jane Street Group, Tower Research Capital, and Radix Trading have been reportedly identified as Binance’s three “VIP” clients in the recent lawsuit filed against Binance by the United States commodities regulator, as revealed in an April 5 Bloomberg report. In this article, we will delve into the details of these clients and their alleged involvement in the CFTC lawsuit against Binance.

CFTC Allegations and Identifications

The CFTC’s lawsuit against Binance alleged that the exchange actively facilitated violations of U.S. law by helping U.S. trading firms evade Know Your Customer (KYC) compliance standards, among other things. The firms identified as Binance’s “VIP” clients in the lawsuit were:

  • Radix Trading (“Trading Firm A”): As reported by The Wall Street Journal on March 28, Radix Trading was identified as “Trading Firm A” in the CFTC’s suit.
  • Jane Street Group (“Trading Firm B”): According to Bloomberg’s report on April 5, Jane Street Group was identified as “Trading Firm B” in the lawsuit.
  • Tower Research Capital (“Trading Firm C”): Tower Research Capital was identified as “Trading Firm C” in the CFTC’s suit, as reported by Bloomberg on April 5.

Alleged VIP Treatment and Compliance Violations

The CFTC claimed that these firms received “VIP” treatment from Binance, including lower transaction fees and faster trading services, in exchange for providing liquidity on the exchange and generating trading fee revenues for Binance. However, the CFTC alleged that this arrangement facilitated violations of U.S. law, as Binance allegedly helped these firms evade compliance controls, such as Know Your Customer (KYC) requirements.

For example, the CFTC claimed that Binance enabled Radix Trading to sidestep compliance controls by providing them with information on accessing Binance.com through a Virtual Private Network (VPN) to obscure its IP address.

Binance CEO’s Response

On March 28, Binance CEO Changpeng “CZ” Zhao strongly denied the claims of compliance and market manipulation violations in a follow-up post, refuting the allegations made by the CFTC.