As a yet latest effort by Washington against the formerly booming industry, a top US markets regulator on Monday charged cryptocurrency giant Binance and its founder Changpeng Zhao with multiple violations. The allegations against Binance, the biggest cryptocurrency exchange in the world, are part of a drive to "identify and stop misconduct in the unpredictable and risky digital asset market," according to Rostin Behnam, chairman of the Commodities Futures Trading Commission (CFTC). The allegations were made against Zhao, better known as CZ on Twitter, and three of the businesses that make up his crypto empire.
Zhao was frequently presented as the chief rival of FTX creator and crypto billionaire Sam Bankman-Fried, who was detained in the Bahamas in December and will go on trial in the US later this year. Behnam stated in a statement that Binance "knew they were breaking CFTC rules for years, aggressively working to both keep the money flowing and avoid compliance."
The CFTC "will not tolerate willful disregard of US law," he continued, adding that this should serve as a warning to everyone working in the digital asset industry.
The charge sheet accuses Binance of violating standards expected of a business acting as a derivatives exchange and doing business with significant US trading entities.
According to US media sources, the US Revenue Agency, the Securities and Exchange Commission, and US federal prosecutors are all looking into Binance.
By refusing to register as an explicit asset trader, Binance has repeatedly put regulators to the test while promoting the idea that cryptocurrencies should be exempt from financial regulations.
The lawsuit against Binance comes just a few weeks after two crypto-friendly lenders, Silvergate and Signature, were eliminated by a crisis in US regional banks, further complicating the situation for the company.
Authorities are becoming more and more eager to keep an eye on a market that flourished during the Covid pandemic when many people were confined to their homes and lured by the high rewards offered by trading in Bitcoin.
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