The United States Commodity Futures Trading Commission (CFTC) has filed suit against Binance and CEO Changpeng “CZ” Zhao for trading violations, according to a Bloomberg report. The suit was filed in the U.S. District Court for the Northern District of Illinois.
The CTFC accuses Binance of having an “ineffective compliance program” and claims it “knowingly” broke the law.
The cryptocurrency exchange has been the focus of a CFTC investigation since 2021. The exchange acknowledged in February that it would likely face regulatory action in the United States and was already working with regulators.
Binance has also been investigated by the Internal Revenue Service and federal prosecutors, who have looked into the exchange’s compliance with anti-money laundering rules. Meanwhile, the Securities and Exchange Commission is looking into whether the exchange gave US traders access to unregistered securities.
Binance is the largest cryptocurrency exchange, with a daily trading volume of over $8.5 billion.
The price of Bitcoin (BTC) has plummeted since the announcement, falling from $27,781 to $26,755, before going back up to $26,962 at the time of writing.
Binance concealed the location of its executive offices, as well as the “identities and locations of the entities operating the trading platform,” according to the lawsuit.
Binance employs at least 60 people in the United States, “and that number continues to grow,” according to the CFTC’s complaint. It also owns trademarks in the United States. Binance launched its Binance.US subsidiary in 2019.
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