CFTC looks to tighten its grip around Binance for evading US rules
Binance and Changpeng Zhao see the CFTC, Commodities Futures Trading Commission, tightening its grip on the way they operate. According to recent developments, CFTC has alleged that Binance is into offering futures and options that are unregistered, thereby evading the US rules that it must otherwise follow. They are in place to protect the interest of the US traders. Not following those rules has kickstarted a battle between the CFTC and Binance.
The CFTC claims that the report is rock solid, while Binance argues that the report lacks recitation of facts.
There is some support for the CFTC, with David Slovick, the former enforcement attorney at the CFTC, saying that if Binance is kicked out of the US along with the individuals, then their major source of revenue will dry up. David now helms the position of Partner at Barnes & Thornburg. A complaint against the leading crypto exchange Binance and the executive of the crypto platform comes days after some texts were reported by the media showcasing their plans to elude the US authorities.
A long-running pattern has also been discovered with undisclosed conflicts of illegal activities and interests. The CFTC has alleged that Zhao and Samuel Lim were aware of the regulatory failings but neither acted on it to effectively supervise the operations.
Changpeng Zhao has issued a statement in response to the complaint filed by the CFTC. Zhao has called the filing of the complaint unexpected and disappointing, adding that Binance has been instead working with the CFTC for the past two years.
The Chief Executive of Binance has further refused to agree to the characterization of the issues that have been alleged against them in the complaint. Zhao believes that the complaint lacks recitation of facts to support its comments, issuing clarification about:
- Technology for compliance & US blocks
- Cooperation & Transparency with law enforcement
- Registrations & licenses
- Trading
Zhao is not the only one to come under investigation. Later in the previous week, Justin Sun faced charges by the SEC for circulating offers and selling TRX & BTT without registering them with the regulators. Justin Sun also faces charges of manipulating the secondary market to show a better bottom line for TRX. A complaint filed by the SEC covers his ventures, namely Tron Foundation Limited, BitTorrent Foundation, and Rainberry Inc.
With Justin Sun, a total of eight celebrities face charges for not disclosing that they were compensated for showing off their digital assets.
Zhao has not agreed to the charges, but Binance has expressed its commitment to being transparent in cooperating with regulators and law enforcement agencies. Meanwhile, the complaint filed by the CFTC has been called powerful by the former Chairman of the CFTC – Tim Massad.
Tim has added that the complaint is rather detailed, and it appears to cover a significant portion of the information from those who have earlier worked with the crypto venture.
