The CFTC said, “Despite Binance’s solicitation of and reliance on customers located in the United States to generate revenue and provide liquidity for its various markets, Binance has never been registered with the CFTC in any capacity.”
The Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its CEO, Changpeng Zhao, over alleged violations of federal laws.
In its court filing, the US regulator accused Binance of soliciting orders involving Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and other tokens that the CFTC considers commodities.
Quoting several remarks made by Samuel Lim, the former Chief Compliance Officer at Binance, the CFTC stated that the exchange’s executives used several means to evade compliance controls. As per the CFTC’s statements, Zhao instructed Binance’s US-based clients to hide their locations by using VPNs. This allowed users who had not finished verifying their identities to continue trading crypto.
The regulator also accused Binance of trading on its own platform via 300 “house accounts” owned by Zhao. Furthermore, the CFTC claimed that Binance violated seven core provisions of the Commodity Exchange Act.
“Binance purposefully obscures the identities and locations of the entities operating the trading platform. Zhao has stated that Binance’s headquarters is wherever he is located at any point in time, reflecting a deliberate approach to attempt to avoid regulation.”
Therefore, the CFTC seeks monetary fines from Binance and intends to ban registration and trading on its platform.
Binance has yet to issue an official statement in response to the CFTC’s allegations. So far, CZ has tweeted “4,” referring to an earlier tweet about ignoring “FUD, fake news, attacks, etc.”
Binance’s native token, BNB (BNB), experienced a decline in its pricing shortly after the CFTC issued its statement. The BNB token is currently valued at $308, down by 5.93% in the last few hours.
The price of Bitcoin also fell by 4.2% soon after the SEC revealed its lawsuit against Binance.
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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