In March, the US Commodity Futures Trading Commission charged Binance and Zhao with “willful evasion of federal law.” The Justice Department is probing Binance as well it hasn’t accused the company of any wrongdoing. Zhao and the companies have denied the allegations. In June, the US Securities and Exchange Commission accused Binance Holdings, Zhao and Binance.US with mishandling customer funds, misleading investors and regulators, and breaking securities rules.
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It’s the second round of job cuts this year at the Miami-based firm as it faces a series of mounting legal and operational challenges. The exchange, which is formally called BAM Trading Services Inc., was started in 2019 for US users, who are prohibited from using Binance Holdings. The departure comes as the company controlled by embattled digital entrepreneur Changpeng “CZ” Zhao is eliminating about one third of its workforce, or more than 100 positions, as a regulatory crackdown erodes its business. The global crypto market stands at more than $1 trillion (€924 billion) and has risen sharply in recent months, although it remains far below its 2021 peak of $3 trillion.(Bloomberg) - Binance.US Chief Executive Officer Brian Shroder has left the crypto trading platform and been replaced on an interim basis by Chief Legal Officer Norman Reed, according to a company spokesperson. Regulators are increasingly keen for oversight of a sector which boomed during the coronavirus pandemic when many people were stuck at home and enticed by the big returns seen by trade in Bitcoin. US media reports have said Binance is under investigation by US federal prosecutors, the Securities and Exchange Commission (SEC) as well as the Internal Revenue Service (IRS). Since July 2019, "Binance's compliance program has been ineffective," the CFTC statement said. At Zhao's direction, Binance employees and customers were directed to skirt compliance controls "to maximize corporate profits," the regulator added. Its charge sheet accuses Binance of failing to uphold standards that are required of a company operating as a derivatives market and dealing with major US trading companies. Firms such as brokers that facilitate US customers' trading of such products are required to register with the agency. The CFTC is responsible for oversight of commodities and derivatives markets, including for Bitcoin.
To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video Ineffective compliance program Meanwhile, a spokesperson for Binance said the firm will continue to "collaborate" with regulators. Binance has made "significant investments" to ensure it does not have US users on its platform, the spokesperson said.įuture of cryptocurrencies 'highly uncertain'
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Zhao was often presented as the archrival of crypto tycoon Sam Bankman-Fried, the founder of FTX, who was arrested in the Bahamas in December and faces a US criminal trial later this year.
"Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint," Zhao said in a statement.
Zhao, a billionaire who was born in China and moved to Canada at the age of 12, called CFTC's complaint "unexpected and disappointing." Rostin Behnam, chairman of the CFTC, said the charges against Binance, the world's largest crypto exchange, were part of a campaign to "find and stop misconduct in the volatile and risky digital asset market." Binance CEO is disappointed The CFTC sued Binance, Zhao and its former top compliance executive with "willful evasion" of US law, "while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit." A top US markets regulator, the Commodity Futures Trading Commission (CFTC), on Monday charged cryptocurrency giant Binance, as well as its founder and CEO Changpeng Zhao with operating what the regulator alleged were an "illegal" exchange and a "sham" compliance program.
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