Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CFTC), recently spoke out about the allegations levied against Binance, claiming that the beleaguered cryptocurrency exchangeโs leadership knowingly operated outside of U.S. laws governing the exchange of commodities and futures.ย
Speaking at a fireside chat that took place at the DeCenter Spring Conference at Princeton University on April 14, Bloomberg reports that Behnam told those in attendance that Binance leaders had intentionally flouted the rules concerning operations, including knowingly allowing U.S. citizens to participate on the exchange through the use of virtual private networks (VPNs) and other obfuscation tools.
@Princeton DeCenter Spring Conference kicks off with CFTC chair Rostin Behnam on crypto as commodity, and now a panel on what widespread adoption would mean for regulation and governance. pic.twitter.com/pkHhOWuScj
โ Andrew Chignell (@AndrewChignell) April 13, 2023
โThese are not unsophisticated individuals,โ Behnam said at the event. โThey are starting large companies and offering futures contracts and derivatives to U.S. customers.โ The CFTC head later added โIf you are going to offer futures contracts in the U.S., there is a clear understanding that you are registered with the CFTC and comply by the law.โ
The comments stem from the CFTCโs lawsuit against Binance and its CEO Changpeng โCZโ Zhao for alleged trading violations. Per a report from Cointelegraph, โThe CFTC is pressing seven counts for executing unregistered futures transactions, providing illegal commodities options, failure to register as a Futures Commission Merchant, Designated Contract Market or Swap Execution Facility, failure to supervise diligently or implement AML/KYC measures and law evasion.โ
Related: Binance CEO CZ: Regulators need deep understanding of crypto for proper rules
The nuts and bolts of the CFTCโs suit against Binance โ the exchange also faces legal action from the IRS and federal prosecutors โ relies on supposed evidence that Binance and CZ continued onboarding U.S. customers despite a policy prohibiting such actions and that the company knowingly engaged in illegal futures trading, allegedly running the business afoul of U.S. anti-money-laundering laws.
As #Binance has grown as a company, we’ve continued to increase our investment of resources towards compliance.
Watch the video below to discover more about our dedicated team and the growth of our compliance efforts.
โ Binance (@binance) April 11, 2023
Itโs unclear at this time why the CFTC head would participate in what appears to be flippant public discussion of ongoing investigations. Binance, for its part, continues to assert its participation in good-faith efforts at global compliance.
