Bitcoin is seeing pressure on Monday after the Commodity Futures Trading Commission filed a lawsuit against Binance – the world’s largest crypto exchange.
Why is CFTC going after Binance?
CFTC alleges that the platform violated federal laws to attract U.S. users – an allegation that may result in a significant blow to its operations.
The said complaint is against not just the exchange but its CEO (Changpeng Zhao) and CCO (Samuel Lim) as well. According to CFTC chair Rostin Benham:
There’s no location that will prevent the CFTC from protecting American investors. I have been clear that the CFTC will continue to use all of its authority to find and stop misconduct in the volatile and risky digital asset market.
Responding to the development, CEO Zhao wrote “4” on Twitter that, for its users, is a call to ignore FUD, fake news, and attacks.
CFTC is pushing for more than just fines
Binance does not have permission to operate in the United States. Yet, the watchdog alleges that it served U.S. clients and helped them use shell companies to hide their real locations. Benham added:
For years, Binance knew they were violating CFTC rules, working actively to keep money flowing and avoid compliance. This should be a warning to anyone that CFTC won’t tolerate willful avoidance of U.S. law.
Beyond fines, the Commodity Futures Trading Commission is also pushing for trading and registration bans on Binance and its two senior executives.