Doubts About Binance and Its Founder Bring Back Downfalls to Bitcoin and Cryptocurrencies

US supervisors accuse the company of deliberately flouting financial and regulatory rules

Changpeng Zhao, CEO of Binance.Bloomberg

The shadows of crypto winter are once again looming over cryptocurrencies and digital assets. Just as Bitcoin was starting to regain some of the lost ground, questions were raised about Binance, the world’s largest cryptocurrency platform, and its founder, Changpeng Zhao, uncertainty return and drops to markets.

On this occasion, the reason must be found in the investigation that US regulators have opened on the company and those most responsible for alleged bad practices for years. Specifically, Binance and Zhao were accused this Monday of “numerous violations” of financial and regulatory standards in the country.

“For years, Binance knew it was in violation of CFTC rules, actively working both to keep money flowing and to prevent compliance,” Rostin Benham, chairman of the CFTC, the Futures Trading Commission, said in a statement. options markets.

According to the CFTC, emails and internal chats show that Binance’s alleged efforts to comply with these regulations were a “farce” and that the company “has deliberately chosen, time and again, to place its profits above compliance with the law.” . Eph.

The lawsuit alleges that, since July 2019, Binance has offered derivatives trading to US users, despite theoretically not being able to do so and not requiring any type of identification for those customers, also violating the rules. The US agency considers that the founder and CEO was responsible for all strategic decisions, including a “secret conspiracy” to help important clients to avoid these controls. The regulator also points to Samuel Lim, former Chief Compliance Officer at Binance, for aiding and abetting the alleged wrongdoing.

The lawsuit, filed in federal court in Chicago, is the latest clash between the world’s largest cryptocurrency exchange and US regulators. According to the CFTC, Binance operates through a large network of opaque entities in different countries, all controlled by Zhao, in order to avoid certain regulations and make it difficult to identify those responsible. The company left China before the Beijing government imposed regulations on cryptocurrencies and established its headquarters in the Cayman Islands, although it has subsidiaries operating in many countries.

The announcement of the investigation deepened the declines in the price of cryptocurrencies, where bitcoin, the most popular of the thousands that exist, once again sets the pace. The virtual currency is up more than 3% this Monday and struggles to maintain the level of 27 thousand dollars. ethereum also rounds off 3% declines and tries to save the 1,700 green noteswhile cardano it drops over 3.5% and sits at $0.34.

The US regulator’s accusations coincide with the problems the platform has been facing in recent days. Last Friday, Binance was forced to temporarily suspend deposits and withdrawals from its customers, citing a problem that affected spot operations, as reported through its social networks.

Hours later, Zhao himself, the company’s CEO, informed that a ‘bug’ had occurred which was expected to be resolved within a maximum period of 2 hours, adding that the “pause” in deposits and withdrawals followed the operational procedure.

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