Binance is under scrutiny as the CFTC filed a lawsuit suing the exchange and its CEO, CZ, for alleged regulatory violations. The largest cryptocurrency exchange by trading volume has found itself tied up in legal trouble. The lawsuit alleges that the defendants committed “willful evasion of US law.”
According to reports, the Commodity Futures Trading Commission (CFTC) has initiated a civil enforcement action in a federal court in Chicago against Changpeng Zhao, aka CZ, and three firms that manage the Binance exchange. The lawsuit accuses them of violating multiple provisions of the Commodity Exchange Act and CFTC regulations.
CFTC alleges Binance put profits ahead of complying with law
The largest cryptocurrency exchange is under the radar now on the grounds of allegations that the exchange grew its business in the US even though it stated its intention to block customers from the country. The allegations also continue to state that the exchange conveyed to its customers how to dodge the compliance controls.
CFTC Chairman Rostin Behnam stated in the press release: “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 willful avoidance of U.S. law.
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Additionally, the US CFTC has made allegations that Binance engaged in trading activities with 300 “house accounts” linked to CEO Changpeng Zhao, either directly or indirectly. The lawsuit further claims that the mentioned accounts were not subject to specific protective measures. Following the allegations and lawsuit, the price of BTC and ETH plummeted, with BTC falling below $27,000 and ETH below $1,700.