US regulator sues crypto exchange Binance and boss Changpeng Zhao

theguardian.com:

Binance and its chief executive, Changpeng Zhao, are being sued in the US by commodity market regulators in a complaint that claims the defendants committed “willful evasion of US law”.

The move is the most significant US enforcement action yet against the world’s largest cryptocurrency exchange.

The Commodity Futures Trading Commission (CFTC) said it had filed a civil enforcement action in a federal court in Chicago, charging Zhao and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act and CFTC regulations. The complaint also charges Binance’s former chief compliance officer, Samuel Lim, with helping Binance commit the violations.

The complaint alleges that Binance has grown its US business despite publicly stating its intent to block US customers from accessing the platform.

Allegations in the complaint include a claim that even after announcing US restrictions Binance told its most valuable US customers how to avoid its compliance controls.

“Defendants have disregarded applicable federal laws while fostering Binance’s US customer base because it has been profitable for them to do so,” the CFTC complaint stated. The CFTC said it was seeking punishments including fines and permanent trading bans.

Gretchen Lowe, the CFTC’s chief counsel, said Binance had put profits ahead of complying with the law. The complaint alleges that Binance has broken the law by offering commodity derivatives transactions – which effectively place a bet on the price of a cryptocurrency rather than buying it directly – to US customers since July 2019, despite not being registered with the CFTC.

Lowe said: “Defendants’ alleged wilful evasion of US law is at the core of the Commission’s complaint against