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CFTC Files Suit Against Binance and CEO Zhao for “Willful Evasion” of U.S. Laws and Offering Unregistered Crypto Derivatives Products

The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance and its CEO, Changpeng Zhao. One of the CFTC’s claims is that Binance illegally pursued American clients without first complying with local regulations.

On Monday, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, the largest cryptocurrency platform by trading activity, and its CEO, Changpeng Zhao. CFTC submitted a complaint in federal court in Chicago, alleging that Zhao and his business had broken regulations pertaining to trading and derivatives.

It was alleged in a lawsuit filed in U.S. District Court for the Northern District of Illinois on Monday that Binance conducted derivatives trading in the United States by facilitating the buying and selling of bitcoin (BTC), ether (ETH), litecoin (LTC), tether (USDT), and Binance USD (BUSD). The lawsuit also claimed that under Zhao’s guidance, the business encouraged its workers to use VPNs to conceal their true IP addresses.

Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), said the charges against Binance, the world’s largest crypto exchange, were part of a campaign to “find and stop misconduct in the volatile and risky digital asset market.”

This filing is unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years.

Binance spokesperson said in a statement

The news made Bitcoin and Ethereum, the two biggest cryptocurrencies by market value, go down.

The complaint claims that since at least July 2019, Binance has allowed U.S. citizens to exchange futures, swaps, and options on digital assets such as Bitcoin, Ethereum, and Litecoin on its platform.

According to the allegations made in the complaint, Binance also made efforts to expand its presence in the United States, despite assertions that the exchange would prohibit people living in the United States from accessing Binance’s platform.

Binance compromised its compliance programme in a number of different ways, one of which was by having its officers, employees, and representatives assist users in using a virtual private network (VPN) to conceal their position. CNBC reported last week that the exchange was instrumental in assisting individuals in China to evade restrictions and gain access to the exchange.

Binance has never been registered with the CFTC in any capacity and has disregarded federal laws essential to the integrity and vitality of the U.S. financial markets, unless restrained and enjoined by this Court, Defendants are likely to continue to engage in the acts and practices alleged in this Complaint.

the lawsuit states.

The Commodity Futures Trading Commission (CFTC) has filed a complaint against Binance in an effort to coerce the exchange to give back any profits it may have made illegally as a result of the wrongdoing for which it is being investigated. Additionally, it is demanding that Binance pay legal sanctions, accept trading restrictions, and give up its ability to register within the United States.

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