June 1, 2023

Allcryptonews

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CFTC Chairman declares war on Binance over regulatory compliance concerns

2 min read

The Chairman of the Commodities Futures Trading Commission (CFTC), Rostin Behnam, has declared war on Binance, accusing the cryptocurrency exchange of an “ongoing fraud”. In a televised interview with CNBC, Behnam accused Binance of knowingly marketing unregistered crypto derivatives products in the United States and deliberately circumventing the CFTC’s registration requirements by instructing customers on how to connect to the exchange without disclosing their location in the United States.

Behnam also emphasized that Binance’s lack of a registered headquarter did not allow it to evade U.S. regulations. The CFTC has filed a lawsuit¬†against Binance and its CEO Changpeng “CZ” Zhao, stating that they knowingly marketed unregistered crypto derivatives products in the country. The regulatory body is now more keen on pursuing the exchange with stricter scrutiny, and Behnam stated that they feel pretty confident in this case, which they have been on top of for several years in the crypto space.

According to court records submitted on Monday, internal discussions from Binance were revealed, including one from Samuel Lim, who continued to serve as the exchange’s top compliance officer until January 2022. Lim allegedly suggested that “On the surface we cannot be seen to have U.S. users but in reality we should get them through other creative means”. In response to the lawsuit filed by the CFTC against Binance and its CEO, Changpeng Zhao, the company has denied the charges and has expressed its intention to challenge the lawsuit in court.

Binance has been facing legal hurdles for some time now, including a crackdown from regulators in the UK, Japan, and Canada. The CFTC’s lawsuit against Binance is the latest legal challenge faced by the cryptocurrency exchange, and it remains to be seen how this will impact its operations and user base.

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