Binance and CEO Changpeng Zhao sued by CFTC over trading and derivative violations

Binance, the world’s largest crypto exchange by volume; its CEO Changpeng Zhao; and Chief Compliance Officer Samuel Lim, are being sued by the US Commodity Futures and Trading Commission, according to a filing on Monday.

The company, Zhao, Lim are being sued for allegedly breaking trading and derivatives rules.

The exchange has never registered with the CFTC in any capacity and has “disregarded federal laws” for US financial markets, including laws that implement controls to prevent and detect money laundering, terrorism financing, among other aspects, the filing states.

By May 2021, Binance’s monthly revenue earned $1.14 billion from derivatives transactions, up from $63 million in August 2020, the agency noted. Of that amount, about 16 percent of Binance’s accounts were held by US customers.

Zhao and other involved parties in Binance’s senior management have “failed to properly supervise Binance’s activities and activities and, indeed, have actively facilitated violations of US law, including by assisting and instructing customers located in the United States to evade the compliance controls Binance purported to implement to prevent and detect violations of US law,” the filing added.