Binance and its CEO, Changpeng Zhao, have been accused by the United States Commodity Futures Trading Commission (CFTC) of violating trading and derivatives regulations, according to a Bloomberg report. The CFTC alleges that Binance did not properly register with the derivatives regulator, and the exchange has been under investigation since 2021. The lawsuit also claims that Binance conducted transactions for US customers in Bitcoin, Ether, and Litecoin despite blocking or restricting them from using the exchange.
The exchange has been under investigation by several regulatory bodies, including the Internal Revenue Service and federal prosecutors, for potential violations of Anti-Money Laundering rules, an ongoing investigation by the Securities and Exchange Commission is examining whether Binance permitted American traders to trade in securities that were not registered.
The announcement of the lawsuit has caused the price of Bitcoin to plummet, falling from $27,781 to $26,755 in an hour and 15 minutes. Binance is the largest cryptocurrency exchange, with over $8.5 billion trading volume daily.
The CFTC is pressing seven counts against Binance and its executives, including executing unregistered futures transactions, providing illegal commodities options, failure to register as a Futures Commission Merchant, Designated Contract Market or Swap Execution Facility, failure to supervise diligently or implement AML/KYC measures, and law evasion.
