March 28, 2023 2:30 PM โ Updated April 2, 2023 11:44 PM
Changpeng Zhao (hereinafter CZ), CEO and owner of Binance, is in a very delicate position. This cryptocurrency platform, the largest in the world, is in the crosshairs of the CFTC (Commodity Futures Trading Commission), or Commodity Futures Trading Commission of the United States. This independent agency is in charge of regulating the US financial market and has just filed a lawsuit against Binance and its boss.
At stake, neither more nor less, is the operating license of this Chinese company in the United States. Binance's financial stability has been in question for many months, even as the suspicions of analysts and financial experts increased at the end of last November after the collapse of FTX. Since then, CZ has worked to convey an image of transparency and stability that could be permanently undermined if the CFTC's lawsuit is successful. His future is more uncertain than ever.
Binance, in the eye of the storm
The accusation that the CFTC has presented before a court in Illinois (USA) is very clear. According to this regulator, Binance has violated US regulations governing how to trade digital assets or cryptocurrencies. And he did it, according to the CFTC, by concealing the physical location of his headquarters to evade scrutiny from regulatory bodies. The final problem is that this Chinese company has operated for US citizens without complying with the limits imposed by current regulations.
The probability of Binance dying as a company in the US is very high
The lawsuit is not only directed against CZ personally and Binance as a corporate entity; He also denounced Samuel Lim, who until 2022 was responsible for compliance with the rules in the organization chart of this company. The outlook does not look good for either of them. If the US regulator proves that these two executives have encouraged the illegal operation of digital assets in the US in order to increase Binance's profitability (and, apparently, there are strong indications that this is possible), CZ will be forced to fix it. to all customers affected by these practices.
Furthermore, you will in all likelihood face a multi-billion dollar fine and be expressly prohibited from trading digital assets in the US in the future. As well explained by the Spanish lawyer Cris Carrascosa in the tweet In which he analyzes the dark panorama that hangs over this Chinese company, โBinance in this matter has all the credentials not only to die as a company in the United States, but also so that its employees cannot continue working in regulated entities. In addition to the sanctions.
Changpeng Zhao posted an official statement on the Binance website expressing his surprise and disagreement with the CFTC's complaint. In his appeal, he alleges that his company has been collaborating with this US agency for more than two years and also ensures that the complaint presents an incomplete version of the facts. In addition, she promises to answer all the accusations when the time comes, which suggests that she will appear in the trial that will probably take place in the United States. We'll see what happens at the end, but we can be sure that here begins a soap opera that will surely make a lot of noise in the coming weeks.
Top image: Andrรฉ Franรงois McKenzie
More information: CFTC | Binanza
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