The Commodity Futures Trading Commission (CFTC) has charged Binance, the world’s largest cryptocurrency exchange, and its founder, Changpeng Zhao, with multiple violations. This move is part of a campaign by the CFTC to ‘find and stop misconduct in the volatile and risky digital asset market.’ The charges were aimed at Zhao, as well as three entities that make up his crypto empire. The CFTC accuses Binance of failing to uphold standards that are required of a company operating as a derivatives market and dealing with major US trading companies. Since July 2019, ‘Binance’s compliance program has been ineffective,’ said Rostin Behnam, chairman of the CFTC. Behnam added that Binance actively avoided compliance in order to ‘maximize corporate profits.’
Binance has often refused to register as an outright asset trader, taking the stance that cryptocurrencies are outside the reach of financial rules. The CFTC’s action against Binance follows reports that the company is under investigation by other US federal agencies. US regulators are increasingly keen to have oversight of the crypto sector, which boomed during the Covid pandemic, when many people were enticed by the big returns seen by trading in Bitcoin. The global crypto market has risen sharply in recent months and stands at over $1 trillion, although it remains far below its 2021 peak of $3 trillion.
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