The US Commodity Futures and Trading Commission (CFTC) on Monday sued leading blockchain and cryptocurrency platform Binance for allegedly breaking trading and derivatives rules, reported TechCrunch.
According to the report, along with Binance, the CFTC sued the company's CEO Changpeng Zhao, and Chief Compliance Officer Samuel Lim.
In response to the complaint, CEO Changpeng Zhao (CZ) on Tuesday said the civil complaint filed by the CFTC against them is "unexpected and disappointing".
Complaint by CFTC
According to a filing, the exchange has never registered with the CFTC and has "disregarded federal laws" that govern US financial markets, including laws designed to prevent and detect money laundering and terrorism financing.
Moreover, the CFTC noted that the company's monthly revenue earned $1.14 billion from derivatives transactions in May 2021, up from $63 million in August 2020, and of that amount, around 16 per cent of Binance's accounts were held by US customers, according to the report.
The filing also stated that Zhao and other involved parties in Binance's senior management have "failed to properly supervise Binance's activities and activities and, indeed, have actively facilitated violations of US law, including by assisting and instructing customers located in the US to evade the compliance controls Binance purported to implement to prevent and detect violations of US law".
Zaho calls complaints unexpected and disappointing
Zhao said that Binance.com has developed best-in-class technology to ensure compliance.
"We are aware of no other company using systems more comprehensive or more effective than Binance. We are committed to transparency and cooperation with regulators and law enforcement, in the US and globally," the CEO informed.
Binance said it currently has more than 750 people in its compliance teams, many with prior law enforcement and regulatory agency backgrounds.
"I never participated in Binance Launchpad, Earn, Margin, or Futures. I know the best use of my time is to build a solid platform that services our users," said Zhao, adding that the company will only be able to give full responses to the CFTC civil complaint in due time.
Binance is the world's largest cryptocurrency exchange by trading volume, with around $9 billion in trading activity in the last 24 hours and over 90 million customers worldwide, the report said.
The crypto exchange debuted in June 2017 and within 180 days, had grown to become the world's largest crypto exchange.
US securities and Exchange Commission send notice to Coinbase for breaking securities law
Meanwhile, crypto exchange Coinbase has been put on notice by the US Securities and Exchange Commission for allegedly breaking securities laws.
The SEC move indicates there could be some kind of enforcement action against Coinbase after the investigation is completed.
With inputs from agencies
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