Binance, the world’s largest cryptocurrency exchange by trading volume, has announced that it will seek redress of the complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) against it. The CFTC alleged that Binance illegally offered and sold derivatives linked to digital assets to U.S. customers without registering with the agency.
In a blog post published on July 24, Binance said that it “strongly denies” the allegations and that it intends to “vigorously defend” itself in court. Binance claimed that it has always operated in compliance with the law and that it has taken proactive steps to protect its users and the integrity of the market.
The CFTC in March sued Binance, the world’s biggest crypto exchange, and Zhao for operating what the regulator alleged was an “illegal” exchange and a “sham” compliance program. In its complaint, the CFTC said that from at least July 2019 to the present, Binance “offered and executed commodity derivatives transactions on behalf of U.S. persons” in violation of U.S. laws.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Binance and Zhao were also sued by the U.S. Securities and Exchange Commission (SEC) in June for allegedly operating a “web of deception,” listing 13 charges against Binance, Zhao and the operator of its purportedly independent U.S. exchange. Binance is also under investigation by the Justice Department for suspected money laundering and sanctions violations.
Since the lawsuit, Binance has seen $1.6 billion of overall withdrawals and $852 million in the last 24 hours, Nansen said, in a step up from the average of $385 million per day over the last two weeks. Martin Lee, research analyst at Nansen, said that the outflows were higher than usual, but still not as high as Dec. 13, when investors pulled $3 billion from Binance as they grew nervous about the status of Binance’s reserves.
Binance said that it has never solicited or accepted U.S. customers to trade derivatives on its platform, and that it has implemented robust measures to prevent such access, including geo-fencing, IP blocking, and KYC verification. Binance also said that it has cooperated with the CFTC in the past and that it remains open to dialogue and resolution.
Binance is due to submit its response to the CFTC complaint on July 27 and plans to seek dismissal, according to a court filing on Monday. The CFTC in March sued Binance, the world’s biggest crypto exchange, and Zhao for operating what the regulator alleged was an “illegal” exchange and a “sham” compliance program.
Binance added that it is committed to providing a safe and reliable service to its global user base, and that it will continue to innovate and grow the crypto industry. Binance thanked its users, partners, and supporters for their trust and support, and assured them that it will always act in their best interests. Binance concluded by saying that it is confident that it will prevail in this matter and that it looks forward to clearing its name and reputation.