CFTC sues Binance for evading US federal laws, cryptos plunge



By Sam Boughedda

and other cryptocurrencies fell on Monday after the world’s largest cryptocurrency exchange, Binance, was sued by the US Commodity Futures Trading Commission.

The regulator is suing Binance and its chief executive Changpeng Zhao, better known as CZ, for allegedly violating trading and derivatives rules. The CFTC filed suit Monday in federal court in Chicago.

As of this writing, the is trading around $26,890, down 4%, while down more than 3%, at $1,711.80.

The CFTC claims that Binance evaded its obligations by not registering properly with it. The complaint also alleges that Samuel Lim, Binance’s former compliance officer, aided and abetted Binance’s violations.

The regulator says Binance and many other corporate vehicles were operated “through an intentionally opaque joint venture, with Zhao at the helm as owner and CEO of Binance.”

Binance allegedly offered and executed commodity derivatives transactions to and on behalf of US clients. The CFTC said the exchange’s compliance program was ineffective and that, “under Zhao’s direction”, it instructed its employees and clients to “bypass compliance checks in order to maximize the company’s profits.” business”.

The agency seeks reimbursement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against any further regulatory violations.

CFTC Chairman Rostin Behnam said that for years, “Binance knew it was violating CFTC rules and actively worked to keep the money flowing and avoid complying with the rules” .

For her part, Gretchen Lowe, Senior Deputy Director and Chief Counsel of the CFTC’s Enforcement Division, commented on the case in these terms: “The defendants themselves sent emails and documents to the CFTC: “The emails and discussions from the defendants themselves show that Binance’s compliance efforts were a decoy and that Binance deliberately chose – again and again – to prioritize profits over compliance with the law.



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