The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance, the world’s largest cryptocurrency trading platform, alleging that the company has been operating illegally in the United States by cultivating US business without proper registration with authorities.
The lawsuit accuses Binance of violating numerous US financial laws, including those aimed at preventing money laundering. Binance has denied the allegations and stated that it has been collaborating with regulators in the US and around the world. The CFTC is seeking fines, restitution, and permanent trading and registration bans.
The CFTC lawsuit accuses Binance of violating various US financial laws, including those aimed at preventing money laundering.
Binance has defended its practices, stating that it has made significant investments to ensure that US users are not active on its platform. The company claims to have implemented measures such as blocking users identified as American citizens or residents, or those with a US mobile number.
Binance expressed surprise and disappointment at the lawsuit, stating that it has been collaborating with the CFTC for over two years. The company intends to continue working with regulators in the US and globally to develop a clear and thoughtful regulatory framework that protects its users. Binance believes that collaborating with regulators is the best way forward.
Binance, founded in 2017, is the world’s biggest centralized exchange for digital assets, boasting over 100 million users globally. The company is led by Changpeng Zhao, a Chinese-born Canadian billionaire who was also mentioned in the complaint. According to the CFTC, Binance has been operating in the US since 2019 without proper registration or compliance with relevant US laws. The company allegedly utilized an intentionally obscure global corporate structure to evade oversight.
According to the civil lawsuit filed by the CFTC in federal court in Illinois, Binance had been operating in the US since 2019 without properly registering with the government or complying with relevant US laws. The CFTC also accused the firm of using an “intentionally opaque” global corporate structure to avoid oversight.
During much of this time, Binance allegedly did not require customers to provide any identity-verifying information before trading on the platform. While the firm announced stricter rules in 2021, the CFTC alleged that it provided US-based customers with advice on how to evade those controls using virtual private networks (VPNs) and shell companies.