Binance Accused of Deliberately Breaking US Laws and Under Scrutiny from Multiple US Agencies

Binance, the world’s largest cryptocurrency exchange, has been accused by the Chairman of the Commodity Futures Trading Commission (CFTC) Rostin Behnam of intentionally breaking regulatory rules and failing to comply with US laws. In a recent speech at Princeton University, Behnam criticized Binance and its CEO Changpeng “CZ” Zhao for offering futures contracts and derivatives to US customers without registering with the regulator and failing to keep Americans off the exchange.

“These are not unsophisticated individuals. They are starting large companies and offering futures contracts and derivatives to US customers” Rostin Behman

Binance Under Scrutiny from Multiple US Agencies

The CFTC filed charges against Binance and its CEO on March 27 for violating US laws by illegally offering trading and derivatives services to US customers. This move comes amidst increased scrutiny from multiple US agencies, including the Internal Revenue Service, federal prosecutors, and the Securities and Exchange Commission (SEC).

Impact on Binance Exchange

As a result of these legal challenges, Binance’s trading volume has decreased. Derivatives trading volumes are dropping during US hours since the CFTC lawsuit. The end of zero-fee Bitcoin trading for all trading pairs except TrueUSD has led to a significant decrease in the trading volume of the BTC-USDT pair, falling by almost 90%. Despite these challenges, Binance remains a major player in the cryptocurrency market with a reported daily trading volume of over $56 billion as of April 2023. 

Binance CEO CZ Speaks Out

Binance CEO CZ expressed disappointment with the charges made by the CFTC but has shown intentions to work with the regulator and comply with the charges. The case against Binance highlights the need for clear regulation in the cryptocurrency industry. While the industry has seen explosive growth in recent years, it remains a largely unregulated and volatile space. As regulators seek to bring these markets in line with traditional financial systems, exchanges like Binance will need to adapt to the changing regulatory landscape or risk facing legal consequences.

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