The CFTC took legal action against Binance and its founder for alleged violations. They’re accused of unregistered commodity derivatives transactions for U.S. clients. Binance denies the charges and aims to dismiss the complaint in court.
The CFTC claims Binance operated a sham compliance program, evading U.S. regulations willfully. They allege the platform lacked proper AML and KYC controls. Civil penalties and restitution are sought, with an injunction against future violations.
Detailed allegations include executing unregistered commodity derivatives transactions for U.S. persons. Binance offered futures, options, and swaps on various cryptocurrencies since July 2019. They didn’t register as an FCM or DCO as required by the CEA.
The CFTC alleges Binance evaded U.S. regulations with a deceptive compliance program. It appeared to be CEA compliant but lacked controls to prevent U.S. clients from trading.
Moreover, the CFTC accuses Binance of insufficient AML and KYC controls. Customer identities were not verified, and measures to prevent money laundering were inadequate.
The CFTC’s complaint carries severe implications, potentially resulting in significant fines and operational shutdowns for Binance’s U.S. operations.
