Crypto exchange Binance and its CEO sued by CFTC over regulatory violations

The CFTC claims Binance broke the law by helping US traders access its platform

March 28, 2023

Binance, CEO Changpeng Zhao sued by CFTC over ‘willful evasion’ of US laws

Media reports said the US Commodity Futures and Trading Commission (CFTC) on Monday sued leading blockchain and cryptocurrency platform Binance for allegedly breaking trading and derivatives rules.

Along with Binance, the CFTC sued the company’s CEO Changpeng Zhao, and Chief Compliance Officer Samuel Lim reports TechCrunch.

According to the filing, the exchange has never registered with the CFTC and has “disregarded federal laws” that govern US financial markets, including laws designed to prevent and detect money laundering and terrorism financing.

Moreover, the CFTC noted that the company’s monthly revenue earned $1.14 billion from derivatives transactions in May 2021, up from $63 million in August 2020, and of that amount, around 16 percent of Binance’s accounts were held by US customers, according to the report.

The filing also stated that Zhao and other involved parties in Binance’s senior management have “failed to supervise Binance’s activities and activities properly and, indeed, have actively facilitated violations of US law, including by assisting and instructing customers located in the US to evade the compliance controls Binance purported to implement to prevent and detect violations of US law”.

Binance is the world’s largest cryptocurrency exchange by trading volume, with around $9 billion in trading activity in the last 24 hours and over 90 million customers worldwide, the report said.

The crypto exchange debuted in June 2017 and within 180 days, had grown to become the world’s largest crypto exchange.

Meanwhile, crypto exchange Coinbase has been put on notice by the US Securities and Exchange Commission for allegedly breaking securities laws. The SEC move indicates there could be some kind of enforcement action against Coinbase after the investigation is completed.

[With Inputs from IANS]

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