U.S. cryptocurrency traders escape offshore trading bans

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Americans are circumventing bans aimed at preventing U.S. customers from accessing cryptocurrency exchanges abroad, new research shows.

A report released on Friday revealed that hundreds of Americans are trading risky crypto derivatives on offshore exchanges such as FTX and Binance. The report sheds light on an open secret in the industry: U.S. crypto enthusiasts can easily bypass measures that seek to block them from offshore exchanges.

Crypto derivatives allow traders to place leveraged bets on the rise or fall of bitcoin, dogecoin, or other digital currencies. In the United States, these products are regulated by the Commodity Futures Trading Commission. By operating outside the United States and not serving U.S. clients, exchanges can avoid many CFTC rules, including investor protection requirements and safeguards against money laundering and market manipulation. .

U.S. customers will likely have little or no protection if they trade with unregistered companies that operate outside of the United States, the CFTC said in an emailed statement.

The report was written by Inca Digital, a data company whose technology is used by the CFTC for investigation and market surveillance.

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