Breaking: Binance Sued By CFTC Over Offering Unregistered Crypto Derivative Trading Products in US
The US financial market regulatory agency the Commodities Futures Trading Commission (CFTC) is suing Binance and its founder Changpeng Zhao.
According to a lawsuit the CFTC filed on Monday, Binance and its founder were intentionally promoting illegal cryptocurrency derivative products in the US.
The CFTC believes that Binance offers derivative trading options for the likes of Bitcoin, Ether, Litecoin, Tether and Binance USD, all of which the CFTC claims are commodities.
The CFTC stated that despite openly declaring its apparent goal to “ban” or “restrict” clients based in the United States from using its platform, Binance has chosen a measured, staged strategy to growing its footprint in the country.
According to the CFTC, “Binance, Zhao…, and Lim, the platform’s former Chief Compliance Officer (“CCO”), have each known that Binance’s solicitation of customers located in the US subjected Binance to registration and regulatory requirements under US law.
However, Binance, Zhao, and Lim all made the decision to disobey these demands and weaken Binance’s ineffectual compliance programme by taking actions to assist users in getting over the platform’s access limitations.
Binance Faces Wall of US Lawsuits/Enforcement Action
The US Federal Revenue Service and many federal prosecutors are also looking into Binance due to worries about the company’s lax anti-money laundering (AML) and know your customer (KYC) policies.
Several themes are mentioned in the CFTC lawsuit. According to chat logs, it is claimed that individuals from sanctioned regimes and entities used the platform. CCO Lim stated that other users were “here for crime” and that “terrorists normally send’small quantities'”.
The US Securities and Exchange Commission is also looking into Binance to see if it permitted US traders to access unregistered securities.
Patrick Hillman, chief strategy officer at Binance, acknowledged back in February that the exchange anticipates paying a variety of fines in the midst of numerous ongoing probes to “make atonement” for earlier regulatory transgressions.
Read More: Binance Crypto Exchange Preparing for Regulation Onslaught
With Binance facing a storm of regulatory action, earlier attempts made by the exchange to attract various regulators appear unlikely to have come to fruition.
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