US regulators on Monday accused Binance of operating illegally in the country. The Foreign Exchange Commission (CTC) has announced that it has filed civil lawsuits against the world’s largest cryptocurrency trading platform, its founder and boss, Changpeng Zhao, and its former director of regulatory compliance, Samuel Lim. He accuses them of violating regulations that require operations with futures and derivatives in crude materials and other things to be done through regulated markets. “Don’t write anything,” Zhao said, instructing how to pay the bill using the app’s code, the messages will be automatically deleted.
The action filed in Illinois District Court seeks relief, fines, injunctions and an injunction to prevent further violations of securities and asset trading regulations. There is a new step in the offensive of entities with the world of crypto-currencies that have tried to use the cubit laws, but in the opinion of the makers the laws have been relaxed. Binance has come to consider the purchase of FTX bankruptcy and is one of the great predictors of crypto assets all over the world.
Although Binance said it would remain outside the US market, it was untrue according to the lawsuit, which stated that the platform offered and executed derivative transactions to US customers from July 2019 to the present. “Under Zhao’s direction, Binance has trained its employees and customers to circumvent compliance controls in order to maximize corporate profit,” the CfTc says.
The complaint accuses Binance of failing, for much of that time, to require its customers to provide some information that would allow them to verify their identity before trading on the platform, despite the legal obligation to do so, and that it did not apply basic compliance. systems are designed to prevent and detect terrorist financing and money laundering.
The 74-page case further alleges that even after Binance sought to restrict US customers from accessing its platform, its customers (especially the most valuable US ones) were instructed in the best ways to circumvent the security controls, regulatory compliance of the platform itself. Among the countless failings of the inspection was the detailed instruction given to its employees to communicate with US customers through an App code that was designed to automatically delete messages. According to the lawsuit, Binance thus decided to delete the documents in an effort to retain its US-based customers. They also shared with WeChat and Telegram.
According to the lawsuit, Zhao was allegedly responsible for all major strategic decisions at Binance, including the concept of a secret plot to instruct US-based VIP customers to check compliance and evade the deletion of messages. “Tell them to make sure they don’t connect from a US IP address. Don’t leave anything in writing. (…) Do you have a sign?”, says a message about Zhao included in the lawsuit.
On the platform, he taught US clients how to access virtual private network (VPN) controls based on the Binance IP address or how to create accounts through the company’s own shell to evade other controls.
The lawsuit accuses various companies of using the centralized digital trading platform Binance through an opaque joint venture, led by Zhao as owner and CEO. “The alleged defendants knowingly chose to ignore the appropriate provisions of the CEA while engaging in calculated regulatory arbitrage for their trade,” the CfTc asserts.
The president of the supervisory body, Rostin Behnam, said in a statement: “For years, Biance knew that he was violating the rules of the CfTc, actively working and keeping money flowing and avoiding compliance. This should serve as a warning to anyone in the world of digital assets that the CfTc will not carry out willful evasion of US law.”
“The alleged willful evasion of US law is at the heart of the Commission’s complaint against Binance,” said Gretchen Lowe, Principal Deputy Director and Senior Counsel in the CfTc’s Enforcement Division. “Rei’s own e-mails and conversations suggest that Bianca’s compliance work was a mockery and deliberate over and over again to get the products to comply with the law.”
Hearing the lawsuit, Changpeng Zhao he tweeted a 4; Take a look at his tweet, which lists his four rules for this year. The fourth, to which he now refershe says: “No FUD” [iniciales en inglés de temor, incertidumbre y duda]fake, counterfeit, attack, &c.
Biance has been in the crosshairs of US authorities for years. After the FTX incident, supervisors tighten surveillance. Coinbase agreed in January to pay $50 million for anti-money laundering and other deficiencies. The Securities and Exchange Commission (SEC) has imposed sanctions and opened files against many firms in the area, as well as celebrities who have secretly advertised crypto-assets.
The latest of the big crashes was Genesis, a cryptocurrency firm that was recently accused by the SEC of irregular practices and has already tied up the withdrawal of clients’ funds last November. In January he did the aforementioned assets and declared bankruptcy.
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