The Binance crypto trading platform and its CEO Changpeng Zhao have been accused of violating the rules in a US federal court.
The Commodity Futures Trading Commission (CFTC) has charged Changpeng Zhao, Binance Holdings Limited, Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited for violations of the Commodity Exchange Act (CEA) and CFTC rules.
The court also accused Samuel Lim, Binance’s chief compliance officer from 2018 to 2022, of contributing to violations by his actions. The agency filed its lawsuit in the Federal District Court of Chicago. This lawsuit provides for fines and permanent bans on trade and registration.
The chairman of the CFTC, Rostin Behnam, says that the crypto trading platform has been operating for many years, reliably knowing that the implementation of this process involves various violations of the rules. He also noted that Binance deliberately ignored the requirements and was aimed at maintaining cash flow.
Rostin Behnam said that this trial is a warning to everyone in the world of digital assets that the CFTC will stop activities that contradict US law.
Binance declares cooperation with the CFTC for two years and calls the trial an unexpected and disappointing action. The platform also expressed its readiness to continue cooperation with regulators in the United States and all other countries of the world. Representatives of the company noted that the best way forward is to protect users and cooperate with the authorities to develop a clear and thoughtful regulatory mechanism.
The CFTC complaint alleges that by conducting commodity derivatives transactions in the United States, Binance had an ineffective compliance program and instructed employees and customers to circumvent compliance controls. It is also claimed that the platform has not implemented anti-money laundering procedures and suppression of attempts to finance terrorism.
Binance announced that it is working to ensure that there are no active users from the United States on the platform. Over the past two years, the company has increased the number of employees from 100 to 750 and spent $80 million on external partners who support compliance programs.
In February 2023, Changpeng Zhao announced that there were no intentions to sever ties with American firms. He also noted that Binance has withdrawn some potential investments or applications for bankrupt companies in the United States.
As we have reported earlier, Binance.US Delists Tokens Helium.