Top crypto exchange Binance and CEO Changpeng Zhao sued by US regulator
- The Commodity Futures Trading Commission has accused the company of offering transactions on behalf of US persons in violation of US laws
- The firm, under the direction of Zhao, told employees and customers to go around compliance controls, the CFTC alleges
The world’s biggest cryptocurrency exchange Binance and its CEO and founder Changpeng Zhao have been sued by the Commodity Futures Trading Commission (CFTC) for operating an “illegal” exchange and a “sham” compliance programme, the US regulator said on Monday.
Binance, Zhao and its former top compliance executive knowingly disregarded US commodities law “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit”, the CFTC said.
From at least July 2019 to the present, Binance “offered and executed commodity derivatives transactions on behalf of US persons”, in violation of US laws, the CFTC said in its complaint.
Binance’s compliance programme has been “ineffective” and the firm, under the direction of Zhao, told employees and customers to circumvent compliance controls, the CFTC said, citing a number of practices first reported by Reuters in a series of investigations into the exchange last year.
The CFTC also accused Binance’s former Chief Compliance Officer Samuel Lim of “aiding and abetting” Binance’s violations. Lim did not immediately respond to calls and messages from Reuters.