The U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against crypto exchange Binance and its founder Changpeng Zhao for allegedly offering unregistered crypto derivatives products in the U.S. The CFTC accuses Binance of violating several laws, including not implementing know-your-customer or anti-money laundering processes, and having a weak anti-evasion program.
The announcement affected the crypto market, with bitcoin’s price falling around 3% and Binance’s BNB token dropping 6%. The CFTC claims that Binance created a system to conceal its true operations, with Zhao being solely in control. The suit also alleges that Binance advised U.S. customers to use virtual private networks (VPNs) to bypass restrictions.
A Binance spokesperson expressed disappointment with the CFTC complaint, stating that the company has invested significantly in compliance measures and intends to continue collaborating with regulators globally. Binance now blocks U.S. residents, citizens, cell phone providers, IP addresses, and bank accounts from accessing its platform.