“Why You Need to Take Your Crypto Out; Things are Getting Worse!”

Crypto exchange Binance and its CEO Changpeng Zhao, known as CZ, are being sued by the US Commodity Futures Trading Commission (CFTC) for allegedly allowing Americans to trade derivatives that are illegal in the US. The CFTC claims that despite having no registration with the agency, Binance offered “digital asset futures trading” and other products to US-based customers. The regulator named Binance Holdings Ltd., Binance Inc., and Tether, the issuer of the largest stablecoin USDT, as defendants. The CFTC is seeking fines, disgorgement of profits, and “permanently enjoining” Binance from offering US customers any trading services or products.

Breaking Down the Legal Woes of Binance and CZ

The cryptocurrency industry has recently been hit with some bad news, particularly for Binance and CZ. The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against them, alleging that they have been dodging US laws and encouraging people to skirt around them. As one of the largest holders of cryptocurrency, this news has been detrimental to the industry. In this article, we will break down what the CFTC is alleging, what this means for Binance, and what we can expect moving forward.

The Allegations:

According to the CFTC, Binance has been disregarding applicable federal laws in fostering its US customer base, despite access controls. The CFTC alleges that Binance attempted to broker US exposure to leverage products through VIP customers, rather than through Binance.us. These actions were taken, the CFTC says, because it was profitable for the parties involved. They also claim that internal reports of product revenue were derived from US customers.

In addition, the CFTC alleges that Binance was involved in manipulation and self-dealing through the use of over 300 house accounts owned by CZ, Sigma, and Peak. The CFTC claims that these accounts were used for proprietary trading, despite the lack of reasonable fraud or manipulation steps. This kind of manipulation is considered to be reprehensible, particularly if it is being directed against Binance’s own clients.

The Impact:

Following the allegations made by the CFTC, the cryptocurrency market saw a downturn, with the top 10 crypto list down for the day. Binance’s native token, BNB, was down the most at 5.9%. While Binance has been doing well throughout the bear market, this news has had a profound impact on the company’s value.

Moving Forward:

The CFTC seeks to ban CZ, Lim, and all affiliated entities from engaging in any conduct described in the case. This includes trading unregistered entities, holding any commodity interest, trading digital assets, accepting funds from US persons for purchasing or selling digital assets, registering or exempting with the CFTC, acting as a principal officer or employee of a registered entity, and more.

If Binance is found guilty, it could be liable for billions of dollars in fines, along with the discouragement and made whole clauses. Additionally, Binance US may be dead forever, and market makers with US UBL will be gone from Binance. CZ, Lim, and Binance employees will also be unable to work in regulated businesses or engage in bank dealings in USD with US relations. Binance Labs may also be liquidated, and the company could lose any chance of legally accessing US securities in the future.

While the future remains uncertain for Binance and CZ, it is clear that the cryptocurrency industry is facing a critical juncture. Honest and open discussions about the challenges facing the industry are essential, and those who want to stay informed about cryptocurrency news should keep an eye on developments as they unfold.


Notify of
Inline Feedbacks
View all comments

Coming Soon

Subscribe and be the first to know about the launch

Look at our roadmap


Log In


Thanks for subscribing

You will only receive important notifications
For now, follow to our social networks