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Binance, the world’s largest cryptocurrency exchange, and its CEO Changpeng Zhao sued The U.S. Commodity Futures Trading Commission (CFTC) is suspected of operating an “illegal” exchange, which compliance program officials see as a “calculated strategy of regulatory arbitrage.”
suit, release It is part of a broader crackdown on cryptocurrency companies on March 27.
According to the CRTC, Binance “offered and executed commodity derivative transactions on behalf of U.S. persons,” violating U.S. law, and the exchange’s compliance program was “ineffective.”
“Binance has known for years that they were violating CFTC rules and has been actively working to maintain the flow of funds and avoid compliance. It should be a warning to anyone in the world of digital assets that we will not tolerate willful circumvention of the law,” the lawsuit announced Monday claims.
The CFTC further alleges that Binance directed its employees and customers to circumvent compliance controls under Zhao’s direction. Former Chief Compliance Officer Samuel Lim has also been accused of “aiding” Binance’s breach.
A Binance spokesperson also said the company is making “significant investments” to ensure that U.S. users are not present on its platform, but according to CFTC Chairman Rostin Behnham, Binance executives have known for years that they violated CFTC rules and have been working to keep active US regulators out of the loop.
Binance, per report In response to claims that it will continue to “cooperate” with regulators despite the “unexpected and disappointing” lawsuit, Reuters said:
As expected, there’s been a wide range of reactions from across crypto Twitter.
CryptoSlate’s James Straten Acquires Binance War Chest Stake
#binance We have about $35 billion in war funds. In actual liquidity, it’s nearly $30 billion.
They hold around 420k at POR #bitcoin Approximately ($11.5 billion)
Stablecoin about $10 billion
ETH about $8 billion pic.twitter.com/PyYUxOMiul— James V. Straten (@jimmyvs24) March 27, 2023
But the actual chart alpha is
Introducing the best CZ as a chart artist😂. pic.twitter.com/qadh6aEAtA
— CryptoAnalyst (@web3tokenomics) March 27, 2023
Withdrawals seem to be skyrocketing
analysis: #binance Withdrawals surged following a lawsuit by the Commodity Futures Trading Commission, Nansen data shows Binance holds $63.7 billion in cryptocurrency. pic.twitter.com/9rSfjTqvJg
— Coingraph | News (@CoingraphNews) March 27, 2023
Watcher Guru narrows down to key points.
Just In: 🇺🇸 CFTC Lawsuit Claims 300 #binance Accounts associated with the CEO were exempt from the company’s “insider trading” policy. pic.twitter.com/Z7DPHHS5fH
—Watcher.Guru (@WatcherGuru) March 27, 2023
We won’t be in 2023 without AI
Currently CZ… @cz_binance
#Istandwithbinance #binance #CZ Binance pic.twitter.com/cpo8kLHDt1— Evil Maniac 🅹🅴🅵🅴 (@TheEvilManiac) March 27, 2023
ASH WSB calls FUD
With CZ and Binance being sued, it was assumed that almost every exchange would be sued for one reason or another.
I see no reason to panic. The likely outcome is that Binance will pay the fine and then it will be business as usual.
Many people spread anger because of their involvement.
— Ash WSB (@Ashcryptoreal) March 27, 2023
Traders are just trying to survive.
Accountant: “March 2023 Swap BUSD to USDC, then to USDT, withdraw to Binance, then withdraw to Coinbase, back to bank account, back to Kraken, back to Binance, then back to Bybit Why?”
Me: “I’m just trying not to be lumpy.” pic.twitter.com/eJ7CLxw19C
— Tree of Alpha (@Tree_of_Alpha) March 27, 2023
Some worry about cryptocurrency contagion
Negative effects on the cryptocurrency industry: The legal troubles faced by Binance and its CEO could cast a shadow over the broader cryptocurrency industry. This could lead to increased regulatory scrutiny of other exchanges and platforms /39
— Plan P (Research) 🇪🇺🇺🇸 (@cryptolegacy20) March 27, 2023
Normal CZ
Four
— CZ🔶 Binance (@cz_binance) March 27, 2023
Read more: Binance calls CFTC charges ‘unexpected’, says it will work with regulators
