According to media sources, the US Commodities Futures Trading Commission (CFTC) sued top blockchain and cryptocurrency platform Binance on Monday for allegedly violating trading and derivatives laws.
The CFTC also sued Binance’s CEO Changpeng Zhao and Chief Compliance Officer Samuel Lim, according to TechCrunch.
The exchange has never registered with the CFTC and has “disregarded federal laws” that control US financial markets, including rules meant to prevent and identify money laundering and terrorism funding, according to the petition.
Moreover, the CFTC noticed that the company’s monthly income generated $1.14 billion from futures trades in May 2021, up from $63 million in August 2020, and that around 16% of Binance’s accounts were owned by US consumers, according to the report.
According to the filing, Zhao and other senior management members “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.”
According to the research, Binance is the world’s largest cryptocurrency exchange by trading volume, with roughly $9 billion in trading activity in the previous 24 hours and over 90 million clients globally.
The crypto exchange began in June 2017 and grew to become the world’s largest crypto exchange within 180 days.
Meanwhile, the US Securities and Exchange Commission has issued a warning to cryptocurrency exchange Coinbase for possibly violating securities regulations.
The SEC’s action suggests that when the inquiry is done, Coinbase may face some form of enforcement action.