Binance Holdings Ltd, operator of the world's largest cryptocurrency exchange, is being sued by the US Commodity Futures Trading Commission (CFTC) for allegedly breaking trading and derivatives rules, a statement from the agency, as well as a court filing, showed Monday
WASHINGTON (Pakistan Point News / Sputnik - 27th March, 2023) Binance Holdings Ltd, operator of the world's largest cryptocurrency exchange, is being sued by the US Commodity Futures Trading Commission (CFTC) for allegedly breaking trading and derivatives rules, a statement from the agency, as well as a court filing, showed Monday.
The lawsuit, which also Names Binance Chief Executive Officer Changpeng Zhao as a defendant, requests for "an order of permanent injunction prohibiting defendants and any of their affiliates ... from entering into any transactions involving "commodity interests" ... and/or digital asset commodities," the filing said.
For nearly two years, the CFTC has been probing Binance over whether it failed to keep US residents from buying and selling crypto derivatives. CFTC rules generally require crypto platforms to register with the agency if they let Americans trade those products.
"In its continuing litigation against the defendants, the agency seeks disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations, as charged," the CFTC said in a statement.
The CFTC is one of several US regulators that have been investigating Binance's activities. The Internal Revenue Service, as well as Federal prosecutors, have been examining Binance's anti-money-laundering rule compliance, media reports said. The Securities and Exchange Commission has been scrutinizing whether the exchange has supported the trading of unregistered securities.
"For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance," CFTC Chairman Rostin Behnam said in the agency's statement. "This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of US law."
The lawsuit triggered a sell-off on Monday in traded cryptocurrencies, which have plunged in value over the past year amid multiple allegations and findings of wrongdoings in the industry, aside from a general risk-off attitude among investors responding to US financial and economic challenges. Leading cryptocurrency Bitcoin was down almost $850, or about 3%, hovering at just under $27,000, at the time of writing. In March 2022, Bitcoin traded at above $45,500 at one point.
