U.S. regulator the Commodity Futures and Trading Commission (CFTC) has filed a lawsuit against cryptocurrency exchange Binance alleging that it actively solicits U.S. users and violates American securities laws.
The lawsuit also names Binance co-founder Changpeng Zhao (CZ) and the exchange’s former chief compliance officer Samuel Lim.
The legal filing against Binance is potentially the first salvo in a broader regulatory crackdown on the world’s largest cryptocurrency exchange.
The CFTC lawsuit seeks to enforce bans on Binance from trading crypto and other securities in the U.S.
The regulator alleges that Binance, Zhao and Lim violated the U.S. Commodity Exchange Act, including laws designed to prevent money laundering and terrorism financing.
Binance also allegedly obscured where the exchange’s subsidiaries are located as part of a larger strategy to dupe American authorities, claims the CFTC.
Hours after the lawsuit was filed, Zhao issued a statement saying that Binance cooperates with international and U.S. law enforcement and has frozen $160 million U.S. at the direction of law enforcement groups so far this year.
Binance is privately held and primarily operates in Asia and Europe.
