Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CFTC), recently spoke out against Binance and its leadership, alleging that the cryptocurrency exchange knowingly operated outside of U.S. laws governing commodities and futures.
CFTC Chairman’s Remarks at Princeton University
During a fireside chat at the DeCenter Spring Conference held at Princeton University on April 14, Behnam claimed that Binance’s leaders intentionally violated rules concerning operations. Bloomberg reports that Behnam accused the exchange of knowingly allowing U.S. citizens to participate on the platform using virtual private networks (VPNs) and other obfuscation tools.
According to Behnam, “These are not unsophisticated individuals. They are starting large companies and offering futures contracts and derivatives to U.S. customers.” He also stressed the importance of complying with CFTC regulations: “If you are going to offer futures contracts in the U.S., there is a clear understanding that you are registered with the CFTC and comply with the law.”
Also Read: Coinbase Considers Move Outside US Amid Regulatory Concerns: Reports
CFTC’s Lawsuit against Binance and CEO Changpeng “CZ” Zhao
The CFTC has filed a lawsuit against Binance and its CEO, Changpeng “CZ” Zhao, alleging trading violations. Cointelegraph reports that the regulatory body is pursuing seven counts, including executing unregistered futures transactions, providing illegal commodities options, and failing to register as a Futures Commission Merchant, Designated Contract Market, or Swap Execution Facility. The CFTC also accuses Binance of failing to diligently supervise or implement anti-money laundering and know-your-customer measures and of evading the law.
The core of the CFTC’s suit against Binance relies on evidence that the exchange continued onboarding U.S. customers despite a policy prohibiting such actions and knowingly engaged in illegal futures trading, allegedly violating U.S. anti-money laundering laws. It remains unclear why the CFTC head participated in public discussion of ongoing investigations.
Despite facing legal action from the CFTC, IRS, and federal prosecutors, Binance maintains that it has made good-faith efforts toward global compliance.
In another recent development, the U.S. District Court for the Southern District of New York has issued a subpoena to Justin Sun, the founder of Tron, in connection with a Securities and Exchange Commission (SEC) civil case.
