Cryptocurrency exchange Binance and its CEO Changpeng Zhao have been charged with financial crimes by the US Commodity Futures Trading Commission (CFTC). The charges include operating an illegal digital asset derivatives exchange and wilful evasion of federal law. The CFTC also charged three entities connected to the Binance platform and Samuel Lim, the exchange’s former chief compliance officer, with aiding and abetting its violations. The charges against Binance are just the beginning, as it is expected that the US Department of Justice will also press criminal charges against the exchange and its executives.
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Binance and its CEO CZ Charged with Financial Crimes by CFTC
Binance, the leading cryptocurrency exchange, is facing a legal battle with the Commodity Futures Trading Commission (CFTC) as it charges the exchange and its CEO, Changpeng Zhao (CZ), with financial crimes. Despite people defending Binance’s actions, claiming they are a valuable asset to the crypto space, the truth about Binance’s market manipulation is slowly unraveling.
CFTC’s Indictment on Binance
The CFTC charges CZ and three entities operating the Binance platform with numerous violations of the Commodity Exchange Act and CFTC regulations. The complaint further charges Samuel Lim, Binance’s former Chief Compliance Officer, with aiding and abetting Binance’s violations. This has come as no surprise to Chico Crypto, who has been investigating Binance’s manipulations since 2018.
Binance’s Market Manipulation and Facilitation of Illicit Activity
In 2018, Chico Crypto revealed how Binance was manipulating tokens, indulging in pump and dumps, and market manipulations. Additionally, Binance knowingly facilitated Hamas and customers dealing in illicit activities like drugs with darknet marketplaces.
Binance Trading Against Its Customers
According to CFTC allegations, Binance traded against its customers with approximately 300 “house accounts” owned by CZ, Merit Peak, and Sigma Chain. CZ himself traded on the Binance platform through two individual accounts.
Binance’s Legal Troubles
The CFTC’s indictment on Binance is just the beginning. The DOJ is also investigating Binance for unlicensed money transmission, money laundering conspiracy, and criminal sanction violations. The DOJ is also weighing criminal charges against CZ and other Binance executives. In Chico Crypto’s opinion, the DOJ’s charges against Binance and its executives will likely drop two months from now, as their investigation timeline mirrors that of BitMEX and Arthur Hayes.
