![]() The CFTC says as "of at least May 2022," Binance hadn't filed a single suspicious activity report under anti-money laundering laws in the US. It alleges that despite soliciting and relying on customers located in the US to generate revenue and provide liquidity for its various markets, Binance has never been registered with the CFTC in any capacity and disregarded federal laws including laws requiring the implementation of controls designed to prevent and detect money laundering and terrorism financing. In terms of the CFTC complaint, it sets out the allegations that Binance runs an "intentionally opaque" structure in order to dodge regulation. We do not shy away from challenges," says CZ. In this journey towards freedom of money, we do not expect everything to be easy. And above all, we believe in doing the right thing by our users at all times. While we are not perfect, we hold ourselves to a high standard, often higher than what existing regulations require. We are collaborative with regulators and government agencies all around the world. "At Binance, we look for amicable solutions to all problems. ![]() In an initial response CZ says "Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint." The CFTC is seeking disgorgement, which requires a party that profits from illegal or wrongful acts to give up any profits they made as a result of that illegal or wrongful conduct, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations.Ĭhinese born Canadian citizen Changpeng Zhao, who calls himself CZ, says the CFTC filed an unexpected and disappointing civil complaint, despite Binance working cooperatively with the regulator for more than two years. ![]() ![]() Named as defendants are Binance owner and CEO Changpeng Zhao, three Binance group companies being the Cayman Islands incorporated Binance Holdings Limited, and two companies incorporated in Ireland being Binance Holdings (IE) Limited and Binance (Services) Holdings Limited, Also charged is Samuel Lim, Binance’s chief compliance officer from 2018 to 2022. A key revenue source for Binance is charging its customers transaction fees for trades made on its platform. It alleges Binance, which began operating in New Zealand last October, disregarded applicable US federal laws while growing, maintaining and concealing its US customer base since July 2019 because it was profitable to do so. In its 74-page complaint the CFTC alleges numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations. The CFTC accuses Binance of willful evasion of US federal law and operating an illegal digital asset derivatives exchange, or running a calculated strategy of regulatory arbitrage for commercial benefit. This week's civil enforcement action filed by the United States Commodity Futures Trading Commission (CFTC) against Binance, the world’s largest centralised digital asset exchange, raises interesting issues and questions about how such a company operates across borders, and how a single country's regulator can oversee such an entity within its jurisdiction. ![]()
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