US Regulator Charges Binance for Operating Illegal Cryptocurrency Exchange
Date
3/28/2023 2:18:07 AM
(MENAFN) The US Commodity Futures Trading Commission (CFTC) has charged the cryptocurrency exchange platform Binance with "willful evasion of federal law" and "operating an illegal digital asset derivatives exchange." The CFTC filed a civil enforcement action in the US District Court for the Northern District of Illinois, charging Binance's CEO Changpeng Zhao and three entities that operate the Binance platform, as well as Samuel Lim, Binance’s former chief compliance officer, with aiding and abetting the company's violations.
The regulator alleges that Binance knowingly disregarded applicable provisions of the Commodity Exchange Act (CEA) while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit. The CFTC seeks disgorgement, civil monetary penalties, permanent trading, registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations.
CFTC Chairman Rostin Behnam said in a statement, "For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance." The agency's complaint also charges Samuel Lim, Binance’s former chief compliance officer, with aiding and abetting the company's violations.
The CFTC's move has had an impact on Binance's own cryptocurrency coin BNB, which saw its price falling to $306.5 at 1.55 p.m. EDT, while it was trading around $309.1 at 2.45 p.m. EDT for more than a 6% daily loss. The charges against Binance have sparked concerns among investors and industry analysts, who wonder if this will have a wider impact on the cryptocurrency market and lead to increased regulatory scrutiny of digital assets.
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