US Traders Massively Use VPN to Bypass Cryptocurrency Derivatives Trading Bans
According to a study by Inca Digital, American cryptocurrency traders bypass geo-blocking sites of foreign trading platforms using a VPN.
Traders from the United States easily bypass the restrictions of cryptocurrency exchanges that have closed access based on geographic IP subnets. To do this, they use virtual private networks (VPNs) that change their location to the country where digital asset trading is allowed. In addition, when registering on exchanges, users may deliberately provide inaccurate information about their place of residence.
Inca Digital technology is used by the United States Commodity Futures Trading Commission (CFTC), which regulates derivatives trading in the United States. Offshore sites are not controlled by this agency, so they may not be subject to the CFTC rules regarding the protection of investors and the fight against market manipulation.
Inca Digital analyzed traders’ Twitter posts of successful cryptocurrency transactions. Analysts found about 2,000 similar tweets, 372 of which were written by Americans. Of these, 240 citizens used the Hong Kong FTX exchange. It is assumed that this is only a small part of the real number of traders who bypass the blocking.
More recently, FTX users at the entry-level KYC level could withdraw up to $ 9,000 daily without providing identification documents. Later, the management of the trading platform announced that it would tighten measures to block traders from the United States.
The Binance exchange has repeatedly sent notifications to US citizens to stop using the site, as this violates the laws of their country. Earlier, Forbes reporters published an article in which they stated that Binance allegedly urged US citizens to use VPN services to avoid regulatory oversight. Binance denied these claims and sued the publication for libel.
