Most important crypto exchange in the world under suspicion of fraud

by time news

Dhe allegations by the American stock exchange regulator CFTC are serious: those responsible at Binance are said to have used communication apps with self-deleting messages, knowingly supported terrorist organizations and shown their customers how to conceal their origin. So it says in a 74-page lawsuit that was published on Monday evening.

The lawsuit, which was filed in federal court in Chicago, also contains detailed allegations against Binance founder Changpeng Zhao and his former compliance chief Samuel Lim. Most serious is the allegation that Binance was actively working to attract customers from the United States to win even though Binance did not have permission to operate there. Zhao also actively instructed employees to disguise the company’s locations to avoid prosecution — which would be a deliberate circumvention of US law. In addition, large customers are said to have been asked to set up offshore companies in the British Virgin Islands in order to avoid restrictions.

Some of the published chats are particularly explosive, for example on terrorist financing: In February 2019, it was about transactions by the radical Islamic Hamas, which is also on the European Union’s terrorist list: Lim then frankly explained that terrorists usually send small sums, since large sums would constitute money laundering. One of Lim’s colleagues replied: “You can hardly buy an AK47 for $600″. And regarding certain Binance customers, including customers from Russia, Lim conceded in a chat in February 2020: “Come on. They’re here for crimes.” Another clerk responded by saying that “we see the bad, but we close two eyes.”

The allegations that there were 300 accounts on Binance that belonged directly or indirectly to Binance boss Changpeng Zhao – this is how the markets were manipulated – are particularly serious for confidence in the stock exchange.

Binance itself generally rejected the allegations: “On initial review, the complaint appears to contain an incomplete list of facts,” said company boss Zhao. “We do not agree with the characterization of many of the points alleged in the complaint.” Binance has not yet responded to this newspaper when asked which facts would be missing.

The CFTC is currently asking for a fine, but without going into the details. What happens next depends heavily on Binance: If you get involved in a process, there could be many unpleasant surprises lurking in the books. An out-of-court settlement would still be the safest way for Binance.

Binance has long been a black sheep. Founded in 2017, it has long been in the sights of various investigative authorities. The stock exchange has been under investigation in the United States since 2020, including for money laundering and evading sanctions worth billions. In Germany and Great Britain, too, the authorities have already banned operations due to various offences. It is still unusually quiet on the market for digital currencies. Bitcoin, the oldest and most well-known digital currency, has remained almost stable at around $27,000.

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