CFTC Charges Binance and Its Found & CEO Changpeng Zhao

On 27 March, The Commodity Futures Trading Commission (CFTC) announced that it had filed a civil enforcement action against Changpeng Zhao, the founder of Binance, and the three entities that operate Binance (Binance Holdings Limited, Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited), alleging multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations. It also charged that Samuel Lim, the former Chief Compliance Officer of Coin Securities, with aidding and abetting Coin Securities' violations.

According to the complaint, the CFTC charged Changpeng Zhao and Samuel Lim with knowingly disregarding registration and regulatory requirements under U.S. law and knowingly directing its employees and customers to circumvent compliance controls to maximize corporate profits.

“For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance,” said CFTC Chairman Rostin Behnam.

“Defendants’ alleged willful evasion of U.S. law is at the core of the Commission’s complaint against Binance. The defendants’ own emails and chats reflect that Binance’s compliance efforts have been a sham and Binance deliberately chose - over and over - to place profits over following the law,” said Gretchen Lowe, CFTC’s Enforcement Division Principal Deputy Director and Chief Counsel.

Samuel Lim, the former chief compliance officer of Binance, who has also been charged, is currently living in Singapore. Sources say he declined to provide his address in Singapore in response to the CFTC's subpoena.

A spokesperson for Binance expressed surprise and disappointment at the CFTC's charges.

According to an announcement, Binance intends to continue to work with regulators in the US and around the world. And it also cited the various means the company uses to manage risk in support of its compliance.