Dhe US regulator CFTC has sued the world’s largest cryptocurrency exchange Binance and its founder Changpeng Zhao. The agency accuses the digital currency marketplace of violating US financial market rules in the lawsuit filed in a US federal court on Monday. Binance founder Zhao instructed employees and customers to circumvent controls “to maximize company profits”.
Among other things, the platform did not request any information from its customers to verify their identity, the CFTC said. In addition, Binance has not implemented “basic compliance procedures” against terrorist financing and money laundering.
Authority sees action against Binance as a warning to the crypto industry
“Binance has known for years that it violated CFTC rules,” said agency chief Rostin Behnam. The lawsuit was a “warning to everyone in the digital assets world that the CFTC does not tolerate willful circumvention of US law.” Action against Binance is part of an effort to “find and stop wrongdoing in the volatile and risky digital assets market.”
Binance is the largest cryptocurrency trading platform in the world. The sector has experienced several shocks over the past few months. The cryptocurrency platform FTX, founded by Sam Bankman-Fried, went bankrupt in November. Bankman-Fried was subsequently arrested in the Bahamas and extradited to the United States, where he is charged with fraud, among other things.