The head of the US Commodity Futures Trading Commission (CFTC), Rostin Benham, has accused Binance of intentionally breaking regulatory rules. According to Bloomberg, Benham made the remarks during a recent event hosted by Princeton University, where he criticized the exchange’s compliance with US regulations.
“These are not unsophisticated individuals…They are starting large companies and offering futures contracts and derivatives to US customers,” he says.
Last month, the CFTC sued Binance and its CEO for several alleged violations, including failing to keep Americans off its exchange and not registering with the regulator. Benham’s recent comments suggest that the exchange intentionally broke the rules.
Binance has stated that it was disappointed with the lawsuit but would continue to work with the regulator. However, the exchange’s compliance with US regulations has come under scrutiny from other US bodies, including the Internal Revenue Service and federal prosecutors, who are investigating its compliance with anti-money laundering obligations.
The Securities and Exchange Commission (SEC) has also been investigating whether the exchange has supported the trading of unregistered securities. Benham reiterated that Ether, the second-largest cryptocurrency, as well as stablecoins, are commodities. However, there is still ambiguity around which other virtual coins should be considered securities under American law.
The SEC has taken action against other major crypto firms, including a $30 million settlement with Kraken over its staking program. Staking is a crypto offering that lets users generate yields in return for allowing their tokens to be used to facilitate transactions on a blockchain.
The recent comments by Benham and actions by US regulators suggest that the industry is coming under increasing scrutiny. Crypto firms operating in the US will need to ensure that they are fully compliant with regulatory requirements to avoid facing legal action from the CFTC and other US bodies.
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