Binance, the world’s largest cryptocurrency platform, and its founder and chief executive, Changpeng Zhao, were accused on Monday by US authorities of “numerous violations” of US financial and regulatory rules.
The Commodity Futures Trading Commission (CFTC), which regulates the futures and options markets, filed a lawsuit against Binance in Federal Court in Chicago, asking for monetary sanctions and possible bans on new transactions in certain areas.
“For years, Binance knew it was violating CFTC rules by actively working to keep the money flowing and avoid compliance,” said the regulator’s chairman, Rostin Benham, in a statement.
According to the agency, emails and internal conversations show that Binance’s alleged efforts to comply with these regulations were a “farce” and that the company “deliberately chose, several times, to place profit above compliance with the law”.
The lawsuit states that since July 2019 Binance has been offering derivatives transactions to US users, although it theoretically could not do so, and did not require any identification for these customers, also in violation of regulations.
Furthermore, the CFTC alleges that while Binance intended to restrict access to US customers, it at the same time recommended methods for US customers to bypass the controls and gain access to these transactions.
The American agency believes that the founder and CEO was responsible for all strategic decisions, including a “secret scheme” to help clients considered important to avoid these controls.
Along with Zhao, Samuel Lim, a former company executive, is also accused and held responsible for these violations and attempted evasions of the rules.
According to the regulatory body, Binance operates through a large network of opaque entities in different countries, all controlled by Zhao, in order to avoid certain regulations and make it difficult to identify those responsible.
Founded in China in 2017, Binance left the Asian country before the Beijing government imposed regulations on cryptocurrencies and established its headquarters in the Cayman Islands, although it has branches operating in several countries.
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