Sage Investment Club

The Commodity Futures Trading
Commission (CFTC) has filed a lawsuit against cryptocurrency exchange Binance
and Changpeng Zhao, its Chief Executive Officer, for
“numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations.
The US derivatives market regulator also charged Binance for operating an
illegal digital asset derivatives exchange.The agency disclosed these on
Monday, noting that it filed the charges before a district court in Illinois.
According to the regulator, Binance acted as “a designated contract market or
swap execution facility” by processing derivatives transactions without being
registered.Today the CFTC charged Binance and its founder, Changpeng Zhao, with willful evasion of federal law and operating an illegal digital asset derivatives exchange. Learn more: https://t.co/DdczFgvW6A— CFTC (@CFTC) March 27, 2023The watchdog said it also
charged Binance Holdings Limited, Binance Holdings (IE) Limited and Binance
(Services) Holdings Limited. These entities and others were deployed by Zhao to
run the trading platform via “an intentionally opaque common enterprise.”In the complaint, CFTC alleged
that starting from July 2019, Binance, after supposedly barring US customers
from trading on its platform, actually instructed them on the best methods to
evade its compliance controls. This process was particularly targeted at the
exchange’s “commercially valuable US-based VIP customers,” CFTC saidKeep Reading Furthermore, for a considerable
amount of time since July 2019, Binance failed to verify the identity of its
customers. In addition, the exchange “failed to implement basic compliance
procedures designed to prevent and detect terrorist finance and money
laundering.”CFTC appears to have some internal chat logs, doesn’t sound great on paper“Like come on. They are here for crime.” “we see the bad, but we close 2 eyes.” pic.twitter.com/SvK7hdwSnp— db (@tier10k) March 27, 2023In its complaint, CFTC also
accused Binance of directing its employees to discuss control evasion with
US-based customers using a messaging application that automatically deletes
chats. This was done to erase evidence of the exchange’s efforts to retain its
customers in the country, CFTC alleged. “Defendants’ alleged willful
evasion of U.S. law is at the core of the Commission’s complaint against
Binance,” noted Gretchen Lowe, CFTC’s Enforcement Division Principal Deputy
Director and Chief Counsel.“The defendants’ own emails and
chats reflect that Binance’s compliance efforts have been a sham and Binance
deliberately chose – over and over – to place profits over following the law,”
Lowe added.CFTC Slams Charges on Samuel
Lim, Binance’s Ex-CCOMeanwhile, CFTC said it also
charged Samuel Lim, Binance’s former Chief Compliance Officer (CCO), with
aiding and abetting the cryptocurrency exchange’s violations between 2018 and
2022. The former CCO partook in activities to help
customers circumvent Binance’s compliance controls, the regulator said.For instance, Lim promoted a
policy that “instructed Binance’s US customers to access the trading facility
through a virtual private network to avoid Binance’s IP address-based controls
or create ‘new’ accounts through off-shore shell companies to evade Binance’s
KYC-based controls,” CFTC explained.“For years, Binance knew they
were violating CFTC rules, working actively to both keep the money flowing and
avoid compliance. This should be a warning to anyone in the digital asset world
that the CFTC will not tolerate willful avoidance of U.S. law,” explained Rostin
Behnam, CFTC Chairman.The Commodity Futures Trading
Commission (CFTC) has filed a lawsuit against cryptocurrency exchange Binance
and Changpeng Zhao, its Chief Executive Officer, for
“numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations.
The US derivatives market regulator also charged Binance for operating an
illegal digital asset derivatives exchange.The agency disclosed these on
Monday, noting that it filed the charges before a district court in Illinois.
According to the regulator, Binance acted as “a designated contract market or
swap execution facility” by processing derivatives transactions without being
registered.Today the CFTC charged Binance and its founder, Changpeng Zhao, with willful evasion of federal law and operating an illegal digital asset derivatives exchange. Learn more: https://t.co/DdczFgvW6A— CFTC (@CFTC) March 27, 2023The watchdog said it also
charged Binance Holdings Limited, Binance Holdings (IE) Limited and Binance
(Services) Holdings Limited. These entities and others were deployed by Zhao to
run the trading platform via “an intentionally opaque common enterprise.”In the complaint, CFTC alleged
that starting from July 2019, Binance, after supposedly barring US customers
from trading on its platform, actually instructed them on the best methods to
evade its compliance controls. This process was particularly targeted at the
exchange’s “commercially valuable US-based VIP customers,” CFTC saidKeep Reading Furthermore, for a considerable
amount of time since July 2019, Binance failed to verify the identity of its
customers. In addition, the exchange “failed to implement basic compliance
procedures designed to prevent and detect terrorist finance and money
laundering.”CFTC appears to have some internal chat logs, doesn’t sound great on paper“Like come on. They are here for crime.” “we see the bad, but we close 2 eyes.” pic.twitter.com/SvK7hdwSnp— db (@tier10k) March 27, 2023In its complaint, CFTC also
accused Binance of directing its employees to discuss control evasion with
US-based customers using a messaging application that automatically deletes
chats. This was done to erase evidence of the exchange’s efforts to retain its
customers in the country, CFTC alleged. “Defendants’ alleged willful
evasion of U.S. law is at the core of the Commission’s complaint against
Binance,” noted Gretchen Lowe, CFTC’s Enforcement Division Principal Deputy
Director and Chief Counsel.“The defendants’ own emails and
chats reflect that Binance’s compliance efforts have been a sham and Binance
deliberately chose – over and over – to place profits over following the law,”
Lowe added.CFTC Slams Charges on Samuel
Lim, Binance’s Ex-CCOMeanwhile, CFTC said it also
charged Samuel Lim, Binance’s former Chief Compliance Officer (CCO), with
aiding and abetting the cryptocurrency exchange’s violations between 2018 and
2022. The former CCO partook in activities to help
customers circumvent Binance’s compliance controls, the regulator said.For instance, Lim promoted a
policy that “instructed Binance’s US customers to access the trading facility
through a virtual private network to avoid Binance’s IP address-based controls
or create ‘new’ accounts through off-shore shell companies to evade Binance’s
KYC-based controls,” CFTC explained.“For years, Binance knew they
were violating CFTC rules, working actively to both keep the money flowing and
avoid compliance. This should be a warning to anyone in the digital asset world
that the CFTC will not tolerate willful avoidance of U.S. law,” explained Rostin
Behnam, CFTC Chairman.

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