Breaking: CFTC Files Complaint Against Binance and Founder Over Alleged Violation of US Regulations

In a move that could have significant implications for the cryptocurrency industry, the Commodity Futures and Trading Commission (CFTC) has filed a complaint against Binance and its co-founder Changpeng Zhao in a US federal court. The complaint alleges that the exchange took a “calculated” approach to soliciting US customers, in violation of federal regulations.

Following the news, Binance’s token BNB has dropped by 4%, and as of press time, is trading at $316.

BNB/USDT chart on Binance | Source: TradingView

According to the court filing, Binance and its former top compliance officer, Samuel Lim, actively courted “VIP” customers, including institutional customers, located in the US. This allegedly included creating marketing materials specifically targeting US customers, offering customer service in English, and offering trading pairs that would be of particular interest to US customers.

According to the CFTC’s complaint, Binance and Zhao were aware that their actions violated US regulations and attempted to conceal their activities from regulators. The complaint further alleges that Binance failed to properly register as a futures commission merchant with the CFTC. Additionally, the regulator claims that Binance and Zhao intentionally obscured the locations of the exchange’s subsidiaries as part of a larger strategy to “keep countries clean,” as stated by Zhao himself, according to the filing.

The CFTC’s action against Binance and Zhao comes amid increasing scrutiny of the cryptocurrency industry by regulators around the world. The US Securities and Exchange Commission (SEC) has been particularly active in recent months, bringing a number of enforcement actions against cryptocurrency companies that it alleges have violated securities laws.

The complaint against Binance and Zhao is likely to be closely watched by other players in the cryptocurrency industry, as it could set a precedent for how regulators view the industry’s efforts to operate in a legally compliant manner. It is also likely to add to concerns among investors about the regulatory risks associated with investing in cryptocurrency.

Binance, which is one of the world’s largest cryptocurrency exchanges, has yet to issue a statement in response to the CFTC’s complaint. However, the company has previously stated that it takes compliance with regulatory requirements “very seriously,” and that it works closely with regulators around the world to ensure that its operations are fully compliant with local laws and regulations.

As the cryptocurrency industry continues to grow and mature, it is likely that we will see more regulatory actions against companies that are deemed to be operating in violation of local laws and regulations. Investors in the industry will need to be aware of these risks, and take steps to ensure that they are investing in companies that are operating in a legally compliant manner.

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