US regulator sues Binance for US law wilful evasion

JM — Wed, 14 Jun 2023 05:30:16 +0000

US regulator sues Binance over wilful evasion of US law

The US Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against Binance, one of the world’s largest cryptocurrency exchanges, and its CEO accused of wilful evasion of US law. The complaint also charges Binance’s former chief compliance officer with helping the firm commit the violations. Gretchen Lowe, the CFTC’s chief counsel, critised Binance for putting profits ahead of complying with the law, alleging that the platform has violated the US Commodity Exchange Act and CFTC regulations since 2019. One of the accusations included the offer and carrying out of derivatives transactions to US customers despite declaring its intent to block US clients from accessing its platform. Binance denies the allegations.

US regulators taking concerted action against cryptocurrencies

The CFTC’s legal action against Binance shows US regulators are taking concerted actions against cryptocurrencies. Recently, the US financial watchdog, the Securities and Exchange Commission (SEC), hinted at considering potential enforcement action against Coinbase. Binance has put profits ahead of the law, culminating in the violation of federal laws and regulations. The CTFT claims that Binance did not require client identification before trading, failed to implement basic procedures to prevent terrorist financing and money laundering, and asked employees to communicate with US customers about evading controls through a messaging app that automatically deletes messages. Binance is a well-established cryptocurrency exchange founded by Changpeng Zhao in 2017. The company spokesperson commented that the legal case was unexpected and disappointing while saying, “The best path forward is to protect our users and to collaborate with regulators to develop a clear, thoughtful regulatory regime.”

Unknown impact of legal action

It is unknown how this legal action will affect the UK market, or if other cryptocurrency exchanges could face similar legal issues. Overall, this case highlights the significance of the difference in cryptocurrency regulations across different countries. As the popularity of cryptocurrencies grows, it is essential to have clear and consistent regulations across jurisdictions.

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SEC Sues Binance and CEO Changpeng Zhao for ‘Mishandling Billions of Dollars’

JM — Tue, 13 Jun 2023 10:56:02 +0000

The SEC accuses Binance of ‘mishandling billions of dollars’

The world’s leading cryptocurrency exchange, Binance, and its CEO, Changpeng Zhao, are being charged with syphoning off investors’ funds and mishandling billions of dollars. The US Securities and Exchange Commission (SEC) alleges that Binance mixed customer funds and diverted them to a Zhao-controlled entity while publicly claiming that US customers were restricted from transacting on Binance.com.

Binance generated $116 billion in revenue

The SEC claimed that the founders violated the rules and regulations of the road, and knowingly put their customers and investors at risk. The federal court complaint alleges that between June 2018 and July 2021, Binance generated $11.6 billion in revenue primarily from transaction fees.

Lawsuit likely to have ripple effect on crypto industry

The lawsuit is likely to have a ripple effect through the crypto industry. Market players say the SEC’s charges could hobble Binance, which processes roughly $65 billion in trades daily, and thought to dominate cryptocurrency trading.

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