The regulatory body American CFTC (Commodity Futures Trading Commission) wants to ban Binance in the United States. The crypto platform is indeed facing illegal activity charges in federal court. Even though Binance denies these claims, crypto stock values appear to be impacted.
US regulators attack
The CFTC officially brings a civil lawsuit against Binance through a lawsuit filed in federal court in Illinois. In its legal action, the CFTC notably accuses Binance of circumventing American rules. The body states that Binance has never actually registered with the government despite operating since 2019 in the country.
The complaint states that the crypto firm did not require identity verification information from its clients before trading on the platform. A process which would therefore not comply with American laws and especially those relating to money laundering. Additionally, the CFTC accuses Binance of using a business model “intentionally opaque” to avoid surveillance.
For all these reasons, the CFTC is taking legal action to “protect American investors”. The organization also intends by this operation, to warn all the actors of the crypto sector. Furthermore, the CFTC’s complaint specifically seeks to demand the payment of fines and damages. The platform also faces the risk of a permanent ban both for its activities and for registration.
What does Binance say on the subject?
Binance defended itself against these accusations in a press release. The company declares in particular to have carried outsignificant investmentsto exclude US citizens from the platform. Indeed, the company could block US citizens or residents whose identity is confirmed. The same was true for users who registered with a US phone number.
Binance also says it is surprised by this legal action. The company also confides that it has been working with the CFTC for two years and that it is in favor of the continuation of this agreement.
As a reminder, Binance is the largest centralized digital asset exchange in the world. Founded in 2017, the company is run by Changpeng Zhao, a Chinese-Canadian billionaire. In addition, the platform claims to have more than 100 million users worldwide.
Stronger regulation for the entire crypto sector
Regulators are now on the lookout in the cryptocurrency industry. The level of surveillance has actually increased, thus causing a considerable drop in prices. This situation was also foreseeable, because American officials have been issuing warnings since last year.
It was then expected that the existing laws would be applied to avoid conflicts of interest and require more transparency. Since then, regulators have filed lawsuits against various companies in the field, including Sam Bankman-Fried, FTX, Bitfinex, and Tether.
Moreover, the effects of this new complaint are already visible on the market. Bitcoin would thus have fallen to its lowest level for 10 days (26,543 dollars). Furthermore, the Binance Coin (BNB) would have suffered a 6% drop.
