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Crypto Twitter reacts to CFTC lawsuit against Binance 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.

Crypto Twitter reacts to CFTC lawsuit against Binance

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.

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Read more: Binance calls CFTC charges ‘unexpected,’ says it will cooperate with regulators

 

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