Binance CEO Changpeng Zhao has also been sued by the United States for “deliberate evasion of US law.”
The world’s largest cryptocurrency exchange, Binance , is having a tough time. The exchange and its CEO, Changpeng Zhao , have been sued by the United States Commodity Futures Trading Commission (CFTC).
The entity sued Binance , Zhao, and a former top compliance executive for “deliberate evasion of US law while engaging in a calculated strategy of regulatory arbitrage for their business benefit.”
For the CFTC, Binance is an “illegal” ball and even “a farce”.
In trouble
US regulators are in the midst of a drastic campaign against cryptocurrency companies .
The vast majority of lawsuits by US prosecutors and investigators have focused on “illegal deals” and failure to comply with rules designed to prevent illegal activity. The boom in the midst of the pandemic and the strong crisis of 2022 have increased the pace of government activity in the sector.
For the CFTC, Binance “offered and executed commodity derivative transactions on behalf of US persons in violation of US law” since at least July 20219.
Binance ‘s compliance program has been “ineffective” and the company, led by Zhao, told employees and customers to circumvent compliance checks, the CFTC said, citing a number of practices first reported by Reuters . in a series of investigations into the exchange last year.
The CFTC also accused former Binance Chief Compliance Officer Samuel Lim of “aiding and abetting” the company’s violations.
If regulators prove that executives have encouraged the illegal operation of digital activities for the purpose of benefiting the company’s revenue, Binance will be forced to redress all affected clients, in addition to suffering a penalty of millions of dollars and obtaining bans. of its operations in the United States.