Today, the US Commodity Futures Trading Commission (CFTC) has sued Changpeng Zhao’s major crypto derivatives exchange Binance Holdings Ltd. for allowing Americans to trade crypto derivatives. Interesting details emerge from the case file.
Black money allegations in CFTC’s Binance lawsuit
The world’s largest cryptocurrency exchange has been threatened with a US trade ban after allegedly hosting accounts linked to Hamas and Russian criminals. It is alleged by regulators that Binance is trying to evade regulations to prevent money laundering, providing high-risk transactions to American investors. In a civil complaint, the CFTC accused Binance and its founder, Changpeng Zhao (CZ), of encouraging Americans to circumvent compliance controls and break market rules, according to the Chicago court. Employees of the business, an offshore cryptocurrency giant, are allegedly joking about how the rules are loose about terrorists using the platform.
The CFTC said it was “large amounts of money laundering” after Samuel Lim, Binance Chief Compliance Officer, received information in February 2019 about the transactions from the Palestinian group Hamas, in which Terrorists often send “small sums”. Lim’s colleague replied: “For $600, an AK47 could barely be bought.” In another online chat about Russian Binance customers, Lim allegedly said: “Come on. They are here for the crime. ” Binance’s money launderer replied, “We see what you’ve done, but we close both eyes.”
On another occasion, Lim is said to have warned that a trader ‘very closely associated with illegal activity’ and responsible for $5m (£4.1m) of suspicious transactions should close their accounts and open a new one. The interference with Binance is likely to have similar effects as the volatility in the crypto markets following the collapse of its biggest rival, FTX, which is being prosecuted on fraud charges in the US.
“Binance relies on the maze of corporate assets!”
The CFTC alleges that Binance was guilty of seven regulatory violations by offering trading of Bitcoin and Ethereum derivatives without complying with US rules or properly recording their operations. He notes that the company fell short on compliance controls while trying to increase its profits, such as requirements to effectively review leads and ban suspicious accounts. The allegations are likely to put further pressure on the cryptocurrency giant, which is facing multiple US investigations, including a criminal case filed by the Department of Justice.
In a letter to Changpeng Zhao earlier this month, US senators accused Binance of facilitating illegal financial behavior, allowing up to $10 billion in payouts to criminals or evading sanctions. Meanwhile, the auditor of the cryptocurrency company resigned in December.
While Binance operates a separate North American operation, Binance.US, the CFTC complaint alleges that Binance has subtly directed its most valuable customers to trade with its less-controlled main international division instead. In legal filings, the CFTC alleges that Binance relies on a ‘maze of corporate assets’ to hide its true ownership. In this context, he states that CZ has repeatedly failed to confirm where Binance is truly headquartered. In the latter case, the CFTC claims that even after Binance officially began restricting US access, it has increased the number of US customers with 18% of US-based traders.
Messages from Binance’s internal emails and Signal
In one case, according to messages from an executive, Binance allegedly hired a firm to do a ‘sketchy’ job when a further audit was requested by a business partner. The regulator said it would seek permanent trading and registration bans against Binance in the US and an injunction preventing Binance and its administrators from controlling or managing the trading of digital assets.
Officials quoted encrypted messages from Binance’s internal emails and Signal app, claiming that the company showed US users how to access the site without warning the authorities, for example, via a virtual private network. Samuel Lim allegedly said in a chat that the company’s customer support teams “seem to be teaching people how to circumvent sanctions.”
According to the accusations, Samuel Lim also said that Binance will develop ways for VIP customers to circumvent any potential compliance barriers. He also noted that these customers may receive special treatment, adding, “We always have a way for the whales.”
“This should be a warning to anyone in the digital asset world,” said CFTC chairman Rostin Behnam. “Binance’s compliance efforts have been a scam and Binance has deliberately (repeatedly) chosen to profit rather than follow the law,” explained Gretchen Lowe, chief advisor to the regulator.
A Binance spokesperson said, “As we have been collaborating with the CFTC for over two years, the complaint by the CFTC is unexpected and disappointing. However, we intend to continue to cooperate with regulators in the US and around the world.”
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram And YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your due diligence and do your own research before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.