A lawsuit was filed against the Binance exchange and its CEO Changpeng Zhao (CZ) by the CFTC.
This news led to a strong decline in digital currencies, led by Bitcoin, which fell below $27,000, to now record 26,825.9, down by 3.43% at the time of writing. Binance was sued for regulatory and administrative wrongdoing.
In Illinois federal court on Monday, a cryptocurrency exchange took a calculated approach to soliciting US customers in violation of federal regulations, according to a court filing.
The complaint says that Zhao and his former chief compliance officer, Samuel Lim, cultivated a base of lucrative and commercially important VIP clients, including institutional clients based in the United States.
The authority alleged that Binance failed to register with the agency as a derivatives broker as required by US law, according to the lawsuit.
The complaint alleges that Binance facilitated violations of US law by helping US customers evade compliance controls and directing customers to mask their locations using virtual private networks, or VPNs.
The invitation stated: Since launching its platform in 2017, Binance has taken a deliberate approach to increasing its presence in the US despite publicly announcing its alleged intention to block or restrict US-based customers from accessing its platform.
The Wall Street Journal reports that the CFTC claims that Binance provided unregistered futures and options contracts to traders from the United States of America.
