CFTC sues top crypto exchange Binance, CEO for ‘willful evasion’

(Reuters) — The world’s biggest crypto exchange Binance and its CEO and founder Changpeng Zhao were sued by the U.S. Commodity Futures Trading Commission on Monday for operating what the regulator alleged was an “illegal” exchange and a “sham” compliance program.

The CFTC sued Binance, Mr. Zhao and its former top compliance executive with “willful evasion” of U.S. law, “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”

The regulator’s lawsuit comes amid a broader and increasingly high-profile crackdown on crypto companies. For years, U.S. prosecutors and civil investigators have targeted crypto firms for illegal offerings and failures to comply with rules designed to prevent illicit activity. But the pace of such government activity has surged recently.

The CFTC said in its complaint on Monday that from at least July 2019 to the present, Binance “offered and executed commodity derivatives transactions on behalf of U.S. persons,” in violation of U.S. laws.

Binance’s compliance program has been “ineffective” and the firm, under the direction of Mr. Zhao, told employees and customers to circumvent compliance controls, the CFTC said, citing a number of practices first reported by Reuters.

The CFTC also accused Binance’s former Chief Compliance Officer Samuel Lim of “aiding and abetting” Binance’s violations. Mr. Lim did not immediately respond to calls and messages from Reuters.



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