US CFTC sues crypto exchange Binance for derivatives trading and violations

The U.S. Commodity Futures and Trading Commission (CFTC) on Monday sued leading blockchain and cryptocurrency platform Binance for allegedly violating trading and derivatives rules, according to media reports.

Along with Binance, the CFTC sued the company’s CEO Changpeng Zhao and Chief Compliance Officer Samuel Lim, reports TechCrunch.

According to the filing, the exchange never registered with the CFTC and “ignored federal laws” that govern US financial markets, including laws designed to prevent and detect money laundering and terrorist financing. .

Additionally, the CFTC noted that the company’s monthly revenue generated $1.14 billion in derivatives transactions in May 2021, up from $63 million in August 2020, and of that amount, about 16% of accounts Binance were owned by US customers, according to the report. .

The filing also stated that Zhao and other parties involved in Binance’s senior management “failed to properly oversee Binance’s business and affairs and, in fact, actively facilitated violations of U.S. law, including by assisting and directing customers located in the United States to evade compliance”. controls that Binance claims to have in place to prevent and detect violations of US law”.

Binance is the world’s largest cryptocurrency exchange by trading volume, with around $9 billion in trading activity in the past 24 hours and more than 90 million customers worldwide, according to the report.

The crypto exchange debuted in June 2017 and within 180 days it became the largest crypto exchange in the world.

Meanwhile, crypto exchange Coinbase has been placed on formal notice by the United States Securities and Exchange Commission for allegedly violating securities laws.

The SEC’s decision indicates that there could be some sort of enforcement action against Coinbase once the investigation is complete.