Binance Is Hiding U.S. Crypto Trading Activity, Regulator Says

Federal regulators sued Binance, the world’s largest cryptocurrency exchange, and two of its senior executives on Monday, alleging that in wooing business from American investors, they had chosen to “knowingly disregard” laws governing certain U.S. financial markets.

In a suit filed in a Chicago federal court, the Commodity Futures Trading Commission said Binance’s founder, Changpeng Zhao, and its former chief compliance officer, Samuel Lim, worked together to attract trading customers who were based in the United States despite the fact that Binance did not have permission to operate in the country.

The regulators said Mr. Zhao and Mr. Lim relied on an “opaque web of corporate entities” to direct business back to a central operation that was controlled by Mr. Zhao. They even helped U.S.-based crypto traders hide their real locations using shell companies, according to the C.F.T.C.

“For years, Binance knew they were violating C.F.T.C. rules, working actively to both keep the money flowing and avoid compliance,” the agency’s chairman, Rostin Behnam, said in a statement announcing the filing of the lawsuit. “This should be a warning to anyone in the digital asset world that the C.F.T.C. will not tolerate willful avoidance of U.S. law.”

Article source: https://www.nytimes.com/2023/03/27/business/binance-cftc-lawsuit.html