CFTC Claims That Binance Intentionally Broke U.S. Laws

Global digital assets service provider Binance has been called out by a United States regulator for intentionally breaking regulations. According to Bloomberg, Rostin Behnam, the chairman of the Commodity Futures Trading Commission (CFTC) chastised Binance Holdings and its Chief Executive Officer (CEO) Changpeng Zhao “CZ” for not complying with U.S. laws.

“These are not unsophisticated individuals. They are starting large companies and offering futures contracts and derivatives to US customers,” Chairman Behnam said while referring to Binance executives during an event which was held at Princeton University.

In March, the independent derivative regulator filed a complaint against the cryptocurrency exchange, its CEO, and another executive identified as Samuel Lim. At the time, CFTC alleged that Binance was involved in certain illegal activities plus the violation of U.S. laws. Offering unregistered commodity trading as well as failure to divulge executive office locations were some of the issues listed by the regulator.

Concerning the failure to list the location of executive offices, the CZ was accused of trying to intentionally circumvent regulation and compliance control. It was said that Binance officials went as far as suggesting the use of Virtual Private Networks (VPNs) to U.S. citizens as a way of hiding their location.

Zhao expressed his displeasure about the CFTC complaint saying that his exchange is one of the few with several collaborations with regulators and 16 licenses in total.

Also, he stated that the accusations lacked substantial evidence to sustain them. Even though CZ made all of these claims, Behnam clarified that Binance had failed to register some of the contracts which it offers to U.S. residents with the CFTC.

CFTC Says BTC, Stablecoins Are Commodities

Additionally, the CFTC Chair revisited the categorization of Bitcoin (BTC), Ethereum (ETH), stablecoins, and other cryptocurrencies as commodities.

Earlier in March, Behnam hinted that stablecoins would be classified as commodities. If Congress agrees to the fact that stablecoin should be regarded as securities, it would mean that the tokens will be treated like goods with value and purchased like gold and oil.

This classification recently intensified the tug-of-war between the CFTC and the Securities and Exchange Commission (SEC). Both parties are still trying to establish who has more authority over cryptocurrencies.