The Commodity Futures Trading Commission (CFTC), the major US financial market regulatory agency, is suing binance and its founder Changpeng Zhao.
is according to file a lawsuit Binance and its founder were charged by the CFTC on Monday with knowingly offering unregistered crypto derivatives products in the US in violation of the law.
CFTC says that binance Bitcoin, Ether, Litecoin, Tether and Binance introduced derivative trading options for the likes of USD, all of which the CFTC claims are commodities.
“Since the launch of its platform in 2017, Binance has sought to increase its United States presence by publicly stating its stated intention to “block” or “prohibit” customers based in the United States from accessing its platform. A calculative, phased approach has been adopted.” CFTC said.
“Binance, Zhao…, and Lim, the Platform’s former Chief Compliance Officer (“CCO”), are each aware that Binance’s solicitation of customers located in the United States subject Binance to registration and regulatory requirements under U.S. law is,” the CFTC continues.
“But Binance, Zhao, and Lim have all chosen to ignore those requirements and undermine Binance’s ineffective compliance program by taking steps to help customers evade Binance’s access controls.”
The CFTC lawsuit comes after a long test Organized by the agency on Binance which started back in 2021.
Binance faces wall of US lawsuits/enforcement action
Binance is also under investigation by the US Internal Revenue Service and various federal prosecutors over concerns about poor adherence to anti-money laundering (AML) and know-your-customer (KYC) controls.
The CFTC suit touches on these topics. Citing chat logs, it claims that users from sanctioned entities and sanctioned regimes used the platform, CCO Lim said that “terrorists usually send ‘small sums'” and other customers “here for crime”. Were.
Binance is also being investigated US Securities and Exchange Commission Does the exchange allow US traders to access unregistered securities?
Back in February, Binance chief strategy officer Patrick Hillman admitted that the exchange is expected to pay various fines amid multiple ongoing investigations to “make amends” for prior regulatory violations.
Read more: Binance crypto exchange braces for regulatory assault
Binance is facing a storm of regulatory action, previous attempts by the exchange woo different regulators Doesn’t seem to have come to fruition.