From Hamas warnings to VIP perks and criminal clients: the US regulator’s claims against Binance
theguardian.comB inance is the world’s largest cryptocurrency exchange and a cornerstone of the $1tn digital asset market. It has 128 million customers, handles $65bn in daily trades and its commercial partners include Cristiano Ronaldo, Italy’s Lazio football team and TikTok megastar Khaby Lame. So when a US regulator announced last week it was suing Binance for “wilful evasion of US law”, it was a significant moment for a sector still reeling from the collapse of FTX.
The Commodity Futures Trading Commission (CFTC) filed the civil enforcement action in a federal court in Chicago, seeking punishments including fines and permanent trading bans. It is suing Binance’s Canadian founder and chief executive, Changpeng Zhao, and three entities that operate the Binance global trading platform over numerous alleged violations of its regulations and of the Commodity Exchange Act. Binance’s former chief compliance officer, Samuel Lim, is also being sued.
The CFTC alleges that Binance traded in crypto-related derivatives with US-based customers despite not having regulatory permission and despite having said in 2019 that it would no longer serve US customers. Binance said the complaint was “unexpected and disappointing” as it had already invested an additional $80m ensuring it complies with regulators around the world.
Running to 74 pages, the complaint is a long read, but worth it for its claims about the highly unconventional way that Binance operates, its attitude to regulation, its customers – whom senior figures allegedly suggested included terrorists – and how its senior operators were apparently willing to put this all down in writing.
It is clear from the evidence presented that the CFTC has access to sensitive material, including the
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