Trading firms Jane Street Group, Tower Research Capital, and Radix Trading have reportedly been identified as three of Binance’s “VIP” clients, which the U.S. commodity watchdog cited anonymously in a recent lawsuit against Binance.
According to an April 5 Bloomberg report citing "people familiar with the matter," Radix Trading is "Trading Company A," as described in the Commodity Futures Trading Commission (CFTC) lawsuit, while Jane Street is "Trading Company B," and Tower Research is "C firm." The companies on the CFTC list are examples of U.S. customers who are said to be able to access Binance. The Wall Street Journal (WSJ) first reported on March 28 that Radix Trading was "Trading Company A."
Radix co-founder Benjamin Brand told The Wall Street Journal in a report on March 30 that he believes the company is acting legally even when dealing with Binance’s offshore entity. In the filing, the CFTC said Binance’s claimed “VIP” treatment includes lower transaction fees and faster transaction services. These companies provided Binance with the liquidity of the exchange, and Binance received corresponding transaction fee income.
The CFTC said it was part of a strategy to "actively facilitate violations of U.S. law" by helping U.S. trading firms circumvent Know Your Customer compliance standards, among other things. Binance allegedly masked its IP address by providing Radix with information about accessing Binance.com through a virtual private network, allowing Radix to circumvent compliance controls.
The CFTC alleges that the trading violations occurred because Binance prioritized “commercial success over compliance with U.S. law.” However, Binance CEO Changpeng Zhao "CZ" vehemently denied claims of compliance and market manipulation violations in a follow-up post on March 28
