U.S CFTC Charges Binance for “Willful Evasion of Federal Law”

The world’s biggest exchange by trading volume Binance is facing charges from the U.S Commodities and Futures Trading Commission (CFTC).

The Commission is is accusing the exchange of willfully avoiding compliance with federal laws while “operating an illegal digital asset derivatives exchange.” In a statement, the CFTC said it had filed a suit seeking civil enforcement on Binance.

Parties involved in the case are Binance CEO Changpeng Zhao and three other parties involved in running the exchange. It also involves the former chief compliance officer of Binance Samuel Lim for “aiding and abetting” the violations.

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CFTC Seeks Permanent Ban on Binance

Binance initially operated in the U.S but because of regulatory demands, created a separate exchange for U.S users. It seems now that the CFTC is demanding a complete ban on the company’s operations in the country.

“The defendants allegedly chose to knowingly disregard applicable provisions of the CEA (Commodity Exchange Act) while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit,” it said in a statement.

It is therefore asking for a permanent trading and registration ban in addition to monetary penalties on Binance among other demands.

Binance’s Regulatory Struggles

Binance has faced regulatory pressures from different countries apart from the U.S. Notably, the French government had not only denied the exchange operational license but also shattered its dream of establishing its headquarters in the country.

It is as a result of this that the CEO is considering establishing the headquarters in Dubai where the laws are much more favorable. How this law suit turns out may impact the crypto industry greatly.


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