15.3 C
New York
June 8, 2023
Dogecoin

Binance Sued by CFTC for Alleged Violations of Trading and Derivatives Rules – Bitcoin News


The world’s largest crypto exchange by trade volume, Binance Holdings Ltd., has been sued by the U.S. Commodity Futures Trading Commission. Binance CEO Changpeng Zhao has been named in the lawsuit and the charges claim the crypto exchange broke several trading and derivatives rules. The lawsuit also names Binance’s former chief compliance officer, Samuel Lim, for allegedly aiding and abetting Binance’s violations.

CFTC Charges Binance with Willful Evasion of Federal Law; CEO Changpeng Zhao Named in Lawsuit

The CFTC has charged Binance with willful evasion of federal law as the regulator insists Binance operated an illegal digital asset derivatives exchange. The CFTC filed the lawsuit in the U.S. District Court for the Northern District of Illinois. The regulator claims that Binance engaged in a calculated strategy of regulatory arbitrage to their commercial benefit.

The crux of the charges stem from Binance allegedly offering commodity derivatives transactions to U.S. residents from 2019 until today. Under CEO Changpeng Zhao’s direction, Binance’s compliance program has been ineffective, the regulator stressed in a press statement.

“The complaint charges that for much of the relevant period, Binance did not require its customers to provide any identity-verifying information before trading on the platform, despite the legal duty that entities like Binance functioning as futures commission merchants (FCMs) collect such information, and failed to implement basic compliance procedures designed to prevent and detect terrorist financing and money laundering,” the CFTC explained on Monday.

The CFTC notes that facilitating derivatives transactions without registering with the regulator is illegal. The regulator stressed that CEO Changpeng Zhao is responsible for such compliance failures. The CFTC stated:

Zhao is liable for Binance’s violations based on his control over Binance and his long-running failure to act in good faith concerning Binance’s misconduct.

Following the news, the entire crypto economy lost 2.94% against the U.S. dollar with bitcoin (BTC) sinking below the $27,000 per unit range. The CFTC is seeking civil monetary penalties, permanent trading and registration bans, and disgorgement. “Today’s enforcement action demonstrates that there is no location, or claimed lack of location, that will prevent the CFTC from protecting American investors,” CFTC Chairman Rostin Behnam said in a statement.

“I have been clear that the CFTC will continue to use all of its authority to find and stop misconduct in the volatile and risky digital asset market,” Behnam added. “For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance. This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of U.S. law,” the chairman concluded.

Tags in this story
abetting, aiding, Binance, binance lawsuit, binance sued, ceo, CFTC, CFTC sues Binance, Changpeng Zhao, Charges, commercial benefit, commodity derivatives transactions, Compliance, Crypto, CZ Sued, derivatives, Digital Asset, evasion, Exchange, federal law, illegal, Lawsuit, Officer, regulatory arbitrage, Rostin Behnam, rules, Samuel Lim, trade, trading, U.S. Residents, violations, volume

What do you think about the CFTC suing Binance? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




Image Credits: Shutterstock, Pixabay, Wiki Commons, Iryna Budanova / Shutterstock.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.



Related posts

Stablecoin supply on cryptocurrency exchanges down 50% in 4 months

franzmejia@icloud.com

Experts Predict Final Hike of 2023 – Economics Bitcoin News

franzmejia@icloud.com

Justin Sun announces end of ambassadorial role for Grenada

Lido DAO (LDO) Rallies 80% In A Week To Outperform Bitcoin, Ethereum, Dogecoin Gains – Benzinga

franzmejia@icloud.com

Georgia Rep. Marjorie Taylor Greene Criticizes Fednow Project, Pushes for Return to Gold Standard – Bitcoin News

Arthur Hayes thinks a crypto bull market is coming

Leave a Comment

bitcoin
Bitcoin (BTC) $ 26,428.08
ethereum
Ethereum (ETH) $ 1,839.96
dogecoin
Dogecoin (DOGE) $ 0.067926
shiba-inu
Shiba Inu (SHIB) $ 0.000008
litecoin
Litecoin (LTC) $ 88.50
ethereum-classic
Ethereum Classic (ETC) $ 16.94
defichain
DeFiChain (DFI) $ 0.336704