Binance is the largest cryptocurrency exchange according to volume, its Chief Executive Officer Changpeng Zhao; and Chief Compliance Officer Samuel Lim, is being accused of trespassing in the U.S. by the U.S. Commodity Futures and Trading Commission According to the filing made on Monday.
The company, Zhao, and Lim are being sued over alleged violations of the rules of derivatives and trading.
The exchange has not been registered at the CFTC in any capacity, and it has “disregarded federal laws” for U.S. financial markets, including the laws that establish controls to stop and identify the financing of terrorism, money laundering, and other criminal activities and terrorism financing, among others the report states.
Binance is the world’s biggest cryptocurrency exchange in terms of trade volume, with around $9 billion worth of transactions over the last 24 hours and more than 90 million customers worldwide according to CoinMarketCap information. The company was launched in June 2017 and in just 180 days, it became the biggest cryptocurrency exchange in the world.
The month of May was 2021. Binance’s month-long revenues amounted to $1.14 billion in derivatives transactions which were up from $63 million in the month of August in 2020 according to the CFTC said. From that, approximately 16 percent of Binance’s accounts are operated in the U.S. by U.S. customers.
“This filing is unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years,” a Binance spokesperson told TechCrunch. “Nevertheless Binance plans to remain in partnership with regulators across the US and across the globe. The best way ahead is to ensure the safety of our users as well as work with regulators in the development of an appropriate, well-thought-out regulatory system.”
Binance has spent $80 million on other partners, such as KYC vendors transactions monitoring, market surveillance tools, and investigative tools to help support its compliance initiatives the spokesperson said.
But, Zhao and other involved individuals in Binance’s leadership have “failed to properly supervise Binance’s activities and activities and, indeed, have actively facilitated violations of U.S. law, including by assisting and instructing customers located in the United States to evade the compliance controls Binance purported to implement to prevent and detect violations of U.S. law,” the document stated.
In addition, a Binance executive announced that it was planning to pay penalties in cash to settle investigations of its business operations within America. U.S. Patrick Hillman, Binance’s chief strategy officer stated that the company’s top executives were unaware of the rules and laws that govern corruption, bribery, and laundering of money.
Binance has been “working with regulators to figure out what are the remediations we have to go through now to make amends for that,” Hillman stated. The result could range from “like a fine” to “could be more.”
The month of December was when Reuters said in December that the U.S. Department of Justice was looking into Binance in 2018 for non-compliance in accordance with U.S. anti-money laundering laws and sanctions, however, it was divided over whether to close the investigation or keep reviewing evidence. The time was when Binance denied the story.