Crypto Giant Binance Sued By US Regulator For Violating Trading Rules

As of July 2019, “Binance’s compliance program has been ineffective,” the statement said.


On Monday, a top U.S. markets regulator accused cryptocurrency giant Binance and its founder Changpeng Zhao of multiple violations, in another move by Washington against the once high-flying sector.

Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), said the charges against Binance, the world’s largest crypto exchange, are part of a campaign to “find and stop wrongdoing in the volatile market. and risky digital assets”.

The allegations targeted Zhao, also known by his Twitter handle CZ, and three entities that make up his crypto empire.

Zhao has often been touted as the archrival of crypto mogul Sam Bankman-Fried, the founder of FTX, who was arrested in the Bahamas in December and faces a US criminal trial later this year.

“For years, Binance has known they violated CFTC rules, actively working both to keep money flowing and to avoid compliance,” Behnam said in a statement.

“This should be a warning to anyone in the digital asset world that the CFTC will not tolerate the willful circumvention of US law,” he added.

The indictment accuses Binance of failing to meet the standards that are required of a company operating as a derivatives market and dealing with large US trading companies.

As of July 2019, “Binance’s compliance program has been ineffective,” the statement said.

Under Zhao’s direction, Binance employees and customers were told to circumvent compliance checks “to maximize corporate profits,” the regulator added.

US media said Binance was under investigation by US federal prosecutors, the Securities and Exchange Commission as well as the Internal Revenue Service.

Binance has frequently tested regulators by not registering as an outright asset trader, espousing the philosophy that cryptocurrencies are beyond the reach of financial rules.

The action against Binance comes just weeks after a crisis at US regional banks wiped out two crypto-friendly lenders, Silvergate and Signature, complicating matters for the company.

Regulators are increasingly keen to monitor a sector that exploded during the Covid pandemic when many people were stuck at home and drawn to the big returns from Bitcoin trading.

The global crypto market stands at over $1 trillion and has been growing strongly in recent months, although it remains well below its 2021 peak of $3 trillion.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)


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