The world’s biggest crypto exchange violated compliance rules, CFTC alleges
27 March 2023 - 19:50
byTom Wilson
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Binance CEO Zhao Changpeng in Paris, France, June 16 2022. Picture: BENOIT TESSIER/REUTERS
Cryptocurrency exchange Binance and executives, including CEO and founder Changpeng Zhao, have been sued by the US Commodity Futures Trading Commission (CFTC) for regulatory violations, according to a court filing on Monday.
Binance, the world’s biggest crypto exchange, had from at least July 2019 to the present “offered and executed commodity derivatives transactions on behalf of US persons”, in violation of US laws, the CFTC said in its complaint.
Binance’s compliance programme has been “ineffective” and the firm, under the direction of Zhao, told employees and customers to go around compliance controls, the CFTC said. It also accused Binance’s former chief compliance officer Samuel Lim of aiding and abetting the violations.
Binance did not immediately respond to a request for comment.
“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 wilful avoidance of US law,” CFTC chair Rostin Behnam said in a statement.
Binance dominates the global digital asset sector. Its core Binance.com exchange, the world’s biggest, processed trades worth about $23-trillion in 2022, according to data provider CryptoCompare. Its trading volumes hit $34-trillion in 2021, Zhao said in 2022.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
US regulator sues Binance and CEO over violations
The world’s biggest crypto exchange violated compliance rules, CFTC alleges
Cryptocurrency exchange Binance and executives, including CEO and founder Changpeng Zhao, have been sued by the US Commodity Futures Trading Commission (CFTC) for regulatory violations, according to a court filing on Monday.
Binance, the world’s biggest crypto exchange, had from at least July 2019 to the present “offered and executed commodity derivatives transactions on behalf of US persons”, in violation of US laws, the CFTC said in its complaint.
Binance’s compliance programme has been “ineffective” and the firm, under the direction of Zhao, told employees and customers to go around compliance controls, the CFTC said. It also accused Binance’s former chief compliance officer Samuel Lim of aiding and abetting the violations.
Binance did not immediately respond to a request for comment.
“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 wilful avoidance of US law,” CFTC chair Rostin Behnam said in a statement.
Binance dominates the global digital asset sector. Its core Binance.com exchange, the world’s biggest, processed trades worth about $23-trillion in 2022, according to data provider CryptoCompare. Its trading volumes hit $34-trillion in 2021, Zhao said in 2022.
Reuters
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