The Commodity Futures and Trading Commission (CFTC) filed a complaint against Binance, the world’s largest crypto exchange. The US regulator accused the company’s management of trading unregistered derivatives.
The CFTC filed a lawsuit in Illinois federal court against Binance and its CEO Changpeng Zhao over the alleged violation of the rules regarding derivatives. The regulator refers to the law, according to which all the exchanges that offer such assets to US citizens must be registered in the CFTC system. Notably, the Commodity Futures and Trading Commission is not the only federal institution that initiated an investigation against the activities of the crypto exchange. Since 2021, the US Internal Revenue Service as well as federal prosecutors have been checking Binance for compliance with anti-money laundering obligations. Meanwhile, the Securities and Exchange Commission (SEC) is finding out whether assets that are considered securities by its standards have been traded on the exchange.
Binance has been operating since 2017. After the collapse of its main competitor FTX in November 2022, Zhao's company was able to increase its market share. The exchange claims that it does not fall under the jurisdiction of the United States since it has no headquarters in the country. However, it cooperates with local regulators.
