After the derivatives regulator sued the cryptocurrency exchange, Binance and its CEO, CZ last month for a long list of alleged infractions, the head of the Commodity Futures Trading Commission chided Binance Holdings Ltd over its compliance with US laws.
Speaking at an event at Princeton University, Rostin Behnam, the CFTC Chairman said that “these are not unsophisticated individuals…They are starting large companies and offering futures contracts and derivatives to US customers.”
Behnam emphasized that Binance knowingly disregarded CFTC regulations. He claims that if Binance intends to sell futures contracts in the US, it is understood that they must register with the CFTC and abide by the law.
Furthermore, Behnam stressed that stablecoins and Ether, the second-largest cryptocurrency, are commodities. Although US regulators predominantly agree that Bitcoin, the most popular token, is a commodity, there is greater uncertainty on which other virtual coins should be classified as securities under American law and subject to the SEC’s stringent investor protection requirements.
The SEC has pursued several legal actions against significant crypto companies, including a $30 million settlement with Kraken, a cryptocurrency exchange, for its staking scheme.
Binance in the Web of Us Authorities
The CFTC last month accused Binance of “sham” compliance with US derivatives regulations, including failing to keep Americans off its exchange as promised and not registering with the agency. Americans are not permitted to trade on Binance’s global exchange according to the regulations of the regulator, which Binance has expressed its disappointment with and commitment to working with.
Numerous US authorities have been looking into Binance’s operations, including the CFTC. The Internal Revenue Service and federal prosecutors are investigating Binance’s adherence to its anti-money laundering responsibilities. The Securities and Exchange Commission has been investigating whether the exchange encouraged the trade of unregistered securities.
