The Commodity Futures Trading Commission (CFTC) has taken a stand against the head of Binance, Changpeng Zhao, and the heads of three other organizations that operate the Binance platform. In particular, against Samuel Lim, formerly Binance’s Chief Compliance Officer.
The CFTC accuses crypto exchange officials of aiding and abetting violations of US laws regulating commodity markets. According to the regulator, the defendants deliberately formed an opaque corporate structure and allegedly chose to ignore the provisions of the Commodity Exchange Laws (CEA) applicable to Binance, “using a calculated strategy of regulatory arbitrage in their commercial interests.”
“For years, Binance has known that they are violating CFTC rules by actively working to keep the financial flow and avoid compliance. This should be a warning to all digital asset exchanges in the world. The CFTC will not tolerate willful evasion of the laws of the United States,” said CFTC Chairman Rostin Behnam.
The Commission believes that the high-profile efforts of Binance to comply with the requirements were fiction, and the management of the exchange deliberately violated the law in an attempt to circumvent the regulatory requirements of the CFTC. According to the authors of the lawsuit, Binance has been offering and executing commodity derivatives trades for US citizens from July 2019 to the present. At the same time, the management of the exchange ignored the need to register activities as an intermediary for derivatives in the CFTC, as required by US law.
Binance’s customer verification and identification process is said to have been ineffective, and at Zhao’s direction, Binance taught its US employees and customers how to circumvent controls in order to maximize corporate profits.
The other day, on the air of the American television channel CNBC, it was suggested that some employees and volunteers of the largest crypto exchange Binance could provide confidential advice to users from countries where the exchange does not have official permission to work. This helped bypass the “know your customer” (KYC) procedure and made it possible to maintain anonymity, similar to serving VIP clients from China.
Source: Bits
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