Crypto Twitter reacts to CFTC lawsuit against Binance Crypto Twitter reacts to CFTC lawsuit against Binance
Binance CEO and exchange sued by US regulator for alleged "Illegal" activity and ineffective compliance program.
2 min read
Updated: Mar. 27, 2023 at 11:01 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Binance, the largest cryptocurrency exchange in the world, and its CEO Changpeng Zhao have been sued by the US Commodity Futures Trading Commission (CFTC) for allegedly operating an “illegal” exchange and a compliance program officials have deemed “a calculated strategy of regulatory arbitrage.”
The suit, released on March 27, is part of a broader crackdown on cryptocurrency companies.
According to the CRTC, Binance “offered and executed commodity derivatives transactions on behalf of US persons,” contravening US laws, and the exchange’s compliance program has been “ineffective.”
“For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance. This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of U.S. law,” the suit released on Monday alleges.
The CFTC further alleges that Binance, under the direction of Zhao, instructed employees and customers to circumvent compliance controls. The former Chief Compliance Officer, Samuel Lim, is also accused of “aiding and abetting” Binance’s violations.
A spokesperson for Binance also said that the company has made “significant investments” to ensure that US users are not present on its platform, but according to CFTC Chairman Rostin Behnam, Binance’s executives were aware for years that they were violating CFTC rules and were actively working to keep U.S. regulators out of the loop.
Binance, per a report in Reuters, stated that in response to the allegations that it will continue to “collaborate” with regulators despite the lawsuit being “unexpected and disappointing.”
Predictably, broader reactions from across crypto Twitter have been streaming in.
CryptoSlate’s own James Straten takes stock of the Binance war chest
#Binance has a war chest of roughly $35B; in actual liquid assets, they have nearer to $30B.
They hold in the POR roughly 420k #BTC roughly ($11.5B)
Stablecoins is roughly $10B
ETH roughly $8B pic.twitter.com/PyYUxOMiul— James V. Straten (@jimmyvs24) March 27, 2023
But the real chart alpha goes to
I present to you CZ at his finest as chart artists 😂. pic.twitter.com/qadh6aEAtA
— CryptoAnalyst (@web3tokenomics) March 27, 2023
Withdrawals appear to be surging
ANALYSIS: #Binance withdrawals surged following a lawsuit by the Commodities Futures Trading Commission, while Nansen data indicates Binance holds $63.7 billion in cryptocurrencies. pic.twitter.com/9rSfjTqvJg
— Coingraph | News (@CoingraphNews) March 27, 2023
Watcher Guru narrows in on an important point.
JUST IN: 🇺🇸 CFTC lawsuit alleges 300 #Binance accounts associated with its CEO were exempt from the company's "insider trading" policy. pic.twitter.com/Z7DPHHS5fH
— Watcher.Guru (@WatcherGuru) March 27, 2023
It wouldn’t be 2023 without AI
CZ right now… @cz_binance
#Istandwithbinance #Binance #CZBinance pic.twitter.com/cpo8kLHDt1— Evil Maniac 🅹🅴🅵🅴 (@TheEvilManiac) March 27, 2023
ASH WSB calls FUD
CZ and Binance getting sued was kind of expected coz almost every exchange is getting sued for one thing or another.
I don’t think there is any reason to panic. Possible outcome will be Binance pays fine and then business as usual.
Many will spread fud for engagement.
— Ash WSB (@Ashcryptoreal) March 27, 2023
Just traders are just trying to stay afloat.
Accountant: "In March 2023, why did you swap BUSD to USDC then to USDT then withdrew it to Binance then to Coinbase then to your bank account back to Kraken back to Binance and then to Bybit?"
Me: "Just trying not to get rugged." pic.twitter.com/eJ7CLxw19C
— Tree of Alpha (@Tree_of_Alpha) March 27, 2023
Others worry about crypto contagion
Negative Impact on the Cryptocurrency Industry: The legal troubles faced by Binance and its CEO could cast a shadow over the broader cryptocurrency industry. This may lead to increased regulatory scrutiny for other exchanges and platforms, /39
— Plan P(research) 🇪🇺🇺🇸 (@cryptolegacy20) March 27, 2023
CZ per usual
4
— CZ 🔶 Binance (@cz_binance) March 27, 2023
Read more: Binance calls CFTC charges ‘unexpected,’ says it will cooperate with regulators
Mentioned in this article
Posted In: Analysis
Author 
Dorian Batycka
Dorian Batycka is a journalist interested in art and technology. He has previously contributed to CoinDesk, Decrypt, Artforum, Artnet News, the Art Newspaper, and many others. He can be found on Twitter and Instagram @temp_projects, where he often memes his way through current financial and art news, scandals, and events.
Latest Alpha Market Report
In this article
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Changpeng Zhao, popularly known as “CZ,” is a notable figure in the cryptocurrency world, primarily for founding and leading Binance, the world’s leading cryptocurrency exchange by trading volume.
