Binance Faces Lawsuit From CFTC For Allegedly Evading Trading And Derivatives Rules

Binance Faces Lawsuit From CFTC For Allegedly Evading Trading And Derivatives Rules

Crypto News:

The Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, accusing the crypto exchange of violating trading and derivatives regulations and operating without proper registration.

According to the CFTC, Binance allowed Americans to trade crypto derivatives on its platform illegally.

Binance responded to the complaint, saying it was unexpected and disappointing and that the company does not agree with the CFTC’s depiction of several concerns raised.

Despite having a team of financial crimes experts, Binance was hit with a lengthy list of allegations that mostly took place before the company ramped up its compliance efforts.

The timing appears to be the issue. Leo Mizuhara, CEO of DeFi asset management platform Hashnote, stated that if a company broke the law in the past, it does not matter if it reformed its behavior in subsequent years.

Binance argued that it has taken steps to improve compliance, including hiring Nils Anderson-Röed, a former Interpol dark web specialist, and Tigran Gambaryan, a former special agent with the IRS, to lead investigations into offenders trying to commit crimes on the exchange.

The company also hired Noah Perlman, a former global head of financial crimes at Morgan Stanley and division counsel at the US Drug Enforcement Administration New York, as its chief compliance officer. Despite these efforts, the CFTC is still concerned about Binance’s past behavior and alleged cooperation with firms in the US to evade regulations.

While the CFTC does value Binance’s compliance efforts, the agency’s priority is whether or not a crime was committed, and changes in behavior after the fact are unlikely to be sufficient.

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