Promising full responses in due time, he said: He even tweeted a link to his initial response to the recent CFTC charges, which he called “unexpected and disappointing”. CZ is an outspoken advocate for cryptocurrencies and regularly tweets about the industry and his company. People visit Binance nearly 15 million times a week to trade on the over 300 cryptocurrencies it offers in more than 1,600 different markets. The regulator has pointed to chat messages as evidence of CZ and Sim’s knowledge of various criminal groups using the exchange. They are charged with taking steps to violate US laws, including directing US-based “VIP customers” to open Binance accounts under the name of shell companies. The CFTC has also levied charges against Binance’s founder and CEO, Changpeng Zhao (known as CZ) and former chief compliance officer Samuel Lim. It says Binance has prioritised commercial success over regulatory compliance. The CFTC’s lawsuit alleges that Binance violated US derivatives laws by offering its derivative trading services to US customers without registering with the right market regulators. This indicates how regulators – particularly those in the US – hope to clamp down on the cryptocurrency industry. But this particular case involves a regulator that does not directly oversee cryptocurrencies. This is not the first time a cryptocurrency exchange has been charged by a regulator. Shares of Coinbase were last down 1.9% to $53.85.Ĭoinbase did not immediately respond to a request for comment.The world’s largest cryptocurrency exchange, Binance, has been hit with a lawsuit by US regulator the Commodity Futures Trading Commission (CFTC). On Thursday, ratings agency Moody's changed its outlook of Coinbase to "negative" from "stable," citing the potential impact of the SEC's lawsuit. The Binance and Coinbase SEC lawsuits "introduced a cloud of uncertainty around these assets and, as a result, our team has decided to end support for them," the company tweeted. Robinhood said it would be removing those three coins effective June 27. crypto exchanges are likely to be in the firing line as a result of this week's lawsuits, which expand the number of cryptocurrencies that the SEC has identified as securities to include some commonly traded tokens, such as Solana, Cardano and Polygon. 'REGULATORY GRAY AREA'Ĭrypto companies started out in a regulatory gray area, but the SEC under Chair Gary Gensler has steadily asserted its jurisdiction over the industry, arguing most tokens are securities and should be subject to the same disclosure rules. EDT (1600 GMT) on Friday, investors had pulled more than $31 million from Binance.US in the prior 24 hours, according to data firm Nansen.īAM Trading, Binance.US's operator, holds customers' funds with California-based Axos Bank, according to a letter from lawyers for BAM Trading to the SEC dated May 26, which was made public by the SEC on Tuesday.Īxos did not immediately respond to a request for comment.īinance.US had struggled to find banking partners after the failure of Signature Bank, the Wall Street Journal reported in April.īinance.US said crypto-denominated trading, deposits, withdrawals and "staking" - where users deposit cryptocurrencies for use in blockchain transactions - would remain fully operational.
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