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The largest cryptocurrency exchange in the world, Binance, is in the sights of American justice. The financial derivatives authority, the CFTC, accuses the company, as well as its boss Changpeng Zhao, of deliberately circumventing US regulations.
While several bills are being discussed in Congress, the American authorities are not wasting time. In the document filed in federal court in Illinois, in the north of the country, the regulator requests that Binance be prohibited from registering and selling certain financial products in the United States.
The Wild West of cryptocurrencies
It has been a while since the Commodity Futures Trading Commission responsible for regulating commodity exchanges, where commodities are traded (CTFC), as well as its stock counterpart, the powerful market policeman, the Securities and Exchange Commission (SEC) have denounced the practices of actors in the middle of the cryptocurrencies. Highly volatile digital assets trade in a legal vacuum. It’s a bit like the Wild West of cryptocurrencies and regulators want to put an end to it.
They accuse Binance of having sold products to American customers in violation of financial regulations, when they had undertaken not to solicit users in the United States. The CFTC states in particular that “ on the instructions of (Changpeng) Zhao, Binance advised its employees and customers to bypass compliance checks (regulatory) to maximize profits “. Also, Binance would have chosen not to ask its American users for proof of identity, as required by financial regulations in the United States, according to the document filed on Monday.
Are cryptocurrencies profiting from the banking crisis?
For CFTC Chairman Rostin Behnam, this should sound like a wake-up call to everyone in the digital asset community. According to experts, the debacle of American banks Silvergate, Silicon Valley Bank and Signature Bank and the banking crisis that followed it greatly benefited the cryptocurrency market. The most famous of them, bitcoin, has thus regained more than 30% of its value in two weeks.
On the other hand, the regulator’s current blow to Binance has had an immediate effect on the cryptocurrency community. Bitcoin thus fell to its lowest level in ten days, at 26,543 dollars. And the Binance Coin (BNB), cryptocurrency attached to the eponymous platform and fourth digital currency by overall valuation, lost more than 6%.
As for the platform and its boss, Changpeng Zhao, they say they have been working with the CFTC for more than two years and say they are disappointed that the regulator has gone so far as to take legal action against them.
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