Bitcoin’s worst secret kept secret: U.S. traders still dodging currency restrictions

U.S. traders continue to easily avoid foreign cryptocurrency exchange restrictions to monetize risky bitcoin bets, according to a new report. 

Cryptocurrency derivatives traders from the US can bypass bans banning them from using exchanges such as Binance and FTX, only using a virtual private network (VPN) that masks the user’s location by projecting it to another country, The Wall Street Journal reported today. 

Many foreign crypto exchanges prohibit U.S. traders from working to avoid the headache associated with regulatory agencies in states. Binance, the world’s largest crypto exchange, today announced it was shutting down its derivatives trading in Europe amid recent pressure from exchange regulators. 

The WSJ looked at Friday’s report by data processing company Inca digital, tweets from U.S. traders praising the amount of money they earn by trading derivatives financial instruments. 

“Trading platforms often rely on filters based on IP address Association that are easily circumvented by a VPN with an exit node in a different jurisdiction,” the report said. 

Crypto crackdowns in UK show ‘good actors from bad’: bitstamp CEO

Of the 2,000 Analytics accounts owned by traders of derivative financial instruments, 372 came from the United States, the report found. And that’s just the tip of the iceberg, because many derivative financial traders don’t brag about their trades on Twitter. 

The Inca study linked US traders to offshore exchanges such as binance, Bitfinex, BitMEX, BYBIT, FTX, Huobi and OKEx.

But there is nothing new about it, and decryption reported this “worst secret” in cryptography years ago-the BitMEX Derivatives Exchange was investigated in 2019 because US traders could use its platform. (Decoding was able to create a bitmex account in New York City, where such trading was prohibited at the time, in less than a minute.)

Trading derivative financial instruments is a place where you can make serious money. 

Unlike spot trading, which involves the immediate purchase of cryptocurrencies such as Bitcoin or Ethereum, traders

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