Binance And CEO Sued By US CFTC For Alleged Regulatory Violations

Mar 27, 2023

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The US Commodity Futures Trading Commission (CFTC) has t against Binance, the world’s largest cryptocurrency exchange, and its CEO, Changpeng Zhao (CZ), alleging that the exchange has been operating illegally in the United States. The complaint, which was filed in the Southern District of New York, accuses Binance and CZ of violating US laws that govern commodity trading, and seeks unspecified monetary penalties and “permanent trading bans.”

JUST IN: 🇺🇸 CFTC lawsuit alleges 300 accounts associated with its CEO were exempt from the company's "insider trading" policy.

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According to the CFTC, Binance has been allowing US customers to trade derivatives on its platform, which is a violation of the Commodity Exchange Act. The Act requires all trading platforms to be registered with the CFTC and adhere to its rules and regulations. Binance has not registered with the CFTC, nor has it implemented the required anti-money laundering and know-your-customer policies.

Binance and Founder Changpeng Zhao Sued by CFTC for Allegedly Violating Trading Rules

The CFTC’s lawsuit follows a string of regulatory crackdowns on Binance in recent months. In February, the UK Financial Conduct Authority (FCA) ordered Binance to cease all regulated activities in the country, citing concerns over anti-money laundering and terrorist financing. Binance subsequently suspended deposits and withdrawals in GBP and EUR, and later announced that it was winding down its futures and options business in Europe.

In response to the CFTC’s lawsuit, Binance has stated that it “takes its compliance obligations very seriously” and is committed to working with regulators. CZ has also denied any wrongdoing, stating that the allegations are “without merit” and that Binance has always operated with the highest standards of integrity.

The CFTC’s lawsuit is the latest in a series of legal challenges that Binance has faced in recent months. In addition to the FCA’s action, the exchange has also been the subject of investigations by regulators in Japan, Germany, and Thailand. Binance’s regulatory troubles have led some analysts to suggest that the exchange may be forced to exit certain markets or overhaul its business practices to comply with local laws and regulations.

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Jem Benny
I am a senior stock trader. I think it is really important to share the knowledge and the experience with rookies. "Must know" and education content creator. I have been following the events of the crypto industry since 2011. I joined Walletinvestor as a content creator providing technical analysis and overviews on the current market situation.