The U.S. Commodity Futures Trading Commission (CFTC) is suing Binance and its founder Changpeng Zhao after the crypto exchange allegedly violated the Commodity Exchange Act and other regulations. The CFTC Is Going After Binance The agency claims Binance has had no regard for current financial laws and has been violating them for the past several years. Heads of the CFTC are now seeking financial penalties and a permanent ban in the United States. CFTC chair Rostin Behnam claimed in a recent statement: 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. Gretchen Lowe –
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The U.S. Commodity Futures Trading Commission (CFTC) is suing Binance and its founder Changpeng Zhao after the crypto exchange allegedly violated the Commodity Exchange Act and other regulations.
The CFTC Is Going After Binance
The agency claims Binance has had no regard for current financial laws and has been violating them for the past several years. Heads of the CFTC are now seeking financial penalties and a permanent ban in the United States. CFTC chair Rostin Behnam claimed in a recent statement:
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.
Gretchen Lowe – principal deputy director and chief counsel to the CFTC’s enforcement division – also threw her two cents into the mix, commenting:
The defendants’ own emails and chats reflect that Binance’s compliance efforts have been a sham and Binance deliberately chose – over and over – to place profits over following the law.
Binance is the world’s largest and most popular digital currency trading platform per its daily trading volume. In just the last few days alone, the company is alleged to have overseen roughly $9 billion in digital transactions. The company is also believed to have about 90 million users in multiple countries.
In its lawsuit against the exchange, the CFTC alleges that Binance is run by various corporate entities rather than a single governing body. This is designed to reportedly help it evade regulation and committee oversights. Right now, the lawsuit names three separate companies and/or divisions of Binance within its pages. They are Binance Holdings Ltd., Binance Holdings (IE) Ltd., and Finance (Services) Holdings Ltd.
The action has sent ripples throughout the space, with the price of bitcoin immediately descending from its nine-month high of around $28K to the high $26K range after the CFTC made the announcement. Ed Moya – an analyst at Oanda – commented on the situation, saying:
Many knew Binance had a bullseye on its back, but this is still unnerving some crypto traders. Binance’s success is needed to ensure a good part of the cryptoverse can grow.
So Many Agencies Are Attacking Crypto
Dessislava Aubert – an analyst at crypto data provider Kaiko – said Binance is the world’s largest crypto exchange, and thus any regulatory action against it would likely have hugely negative effects on the rest of the space.
It seems like lately federal agencies just want to prosecute and criminalize crypto companies as much as possible. Look at the recent track record of the Securities and Exchange Commission (SEC), for example. The group has nailed companies like Kraken, slapping them with heavy fines and ending their staking divisions, and it’s now going after Coinbase.