• The U.S. Commodity Futures Trading Commission (CFTC) is suing Binance and its founder Changpeng Zhao for violating the Commodity Exchange Act and other regulations.
• CFTC chair Rostin Behnam and Principal Deputy Director Gretchen Lowe have both made statements claiming that Binance actively avoided compliance with US law.
• The announcement of CFTC’s lawsuit has sent shockwaves throughout the crypto space, leading to a drop in Bitcoin’s value from $28K to the high $26K range.
CFTC Sues Binance For Financial Violations
The U.S. Commodity Futures Trading Commission (CFTC) is suing crypto exchange Binance and its founder Changpeng Zhao after alleging they violated the Commodity Exchange Act and other regulations. CFTC chair Rostin Behnam has warned that willful avoidance of US law will not be tolerated, while Principal Deputy Director Gretchen Lowe claimed that Binance had placed profits over following the law.
Shockwaves in Crypto Space
The announcement of CFTC’s lawsuit has sent shockwaves throughout the crypto space, leading to a drop in Bitcoin’s value from $28K to the high $26K range according to analyst Ed Moya at Oanda.
Binance – World’s Largest Digital Currency Platform
Binance is currently considered as one of the world’s largest digital currency trading platforms due to its daily trading volume estimated at around $9 billion dollars, as well as having an estimated 90 million users across multiple countries globally.
Multiple Entities Allegedly Helping To Evade Regulation
In its lawsuit against Binance, the CFTC alleges that it is run by various corporate entities rather than a single governing body in order to help it evade regulation and committee oversights – instead being run by three separate companies named: Binance Holdings Ltd., Binance Holdings (IE) Ltd., and Finance (Services) Holdings Ltd..
It remains to be seen how this latest legal battle between the CFTC and one of cryptocurrency’s most successful platforms will play out, but hopefully it can serve as a reminder that financial laws must still be followed even when dealing with digital currencies like Bitcoin or Ethereum.