The ongoing legal dispute between the US and Binance, a popular cryptocurrency exchange platform, has been described as the beginning of an aggressive pursuit by the CFTC. The case has identified Changpeng Zhao as a suspect in the allegations against him, leading to his guilty plea and announcement of stepping down as CEO of Binance.
The CFTC has stressed that its pursuit is impartial and aims to prosecute non-US entities involved in financial assets, including digital currencies. Binance’s protracted legal battle has ensnared its staff, including CEO CZ, and is viewed as just the start of a lengthy legal crackdown.
Binance Ex-CEO CZ Worth $15 Billion Despite Guilty Plea: Forbes
Caroline D. Pham, a CFTC commissioner, emphasized that the authority’s pursuit has no limits, even for the crypto legend CZ. The collapse of the FTX firm last year sparked a series of legal challenges for notable industry players, including Binance.
Commissioner Pham stated, “It should be crystal clear that the CFTC will not stop in its pursuit of non-U.S. entities.” The recent headlines have featured Binance, as its CEO admitted to charges of breaching anti-money laundering laws in the US. His guilty plea resulted in a historic $4.3 billion settlement with the United States, the largest ever from a financial firm, with Zhao also facing a $50 million fine.
As part of the settlement, a portion of the funds will go to the Commodity Futures Trading Commission due to claims of selling unregistered securities to US customers. Richard Teng will take over as the new CEO of Binance following Zhao’s replacement, with Changpeng Zhao released on a $175 million bond until his final hearing in February next year.
Binance had previously attempted to dismiss the allegations brought against it by the US CFTC, and this recent development has spurred the CFTC to aggressively pursue other cryptocurrency exchange firms. The regulator is now focused on taking further legal actions against other exchanges in the strict implementation of US regulations to safeguard customer financial portfolios in digital asset trading.
CFTC Commissioner Christian Goldsmith Romero remarked, “There are no pirate ships in US markets,” and that “access to US customers is a privilege, not a right.” The CFTC has vowed to continue aggressively targeting crypto exchanges in compliance with government regulations regarding financial services.
Goldsmith also stressed that the use of VPNs and other actions to evade KYC rules will not be tolerated, including pop-up questions asking users to confirm their region, such as the United States.
The new legal actions against Binance and CZ come amidst the legal battle faced by former FTX CEO Sam Bankman-Fried, who has pleaded not guilty but was found guilty of several felony counts, including money laundering conspiracies. Bankman-Fried is currently detained at the New York Metropolitan Detention Center and faces a potential sentence of over a century in prison.