• CFTC Chief Rostin Behnam accused Binance of knowingly breaking US laws and violating US derivatives regulations.
• The CFTC sued Binance in March for multiple violations and their business in the US has been suffering since then.
• Crypto companies have increased lobbying efforts to receive more favorable treatment for crypto assets from lawmakers.
CFTC Accuses Binance of Breaking U.S. Law
The head of the US Commodity Futures Trading Commission (CFTC), Rostin Behnam, has accused Binance of knowingly breaking US laws and violating derivatives regulations. In March, the CFTC filed a lawsuit against Binance alleging that they had allowed Americans to trade on its global exchange without registering with the agency, avoiding scrutiny by US regulators. Since then, their business in the US has suffered due to banking partners going bankrupt and banks reportedly turning down Binance due to regulatory risk.
Impact of CFTC Lawsuit
The CFTC’s lawsuit against Binance will set a precedent for how crypto exchanges deal with US-based traders, as their actions could affect traders worldwide due to the size of the US market share. Additionally, questions regarding jurisdiction have been raised as the CFTC claims Bitcoin, Ethereum, and USDT are commodities while its chief says that all cryptos except Bitcoin are securities.
Crypto Companies Lobby for Favorable Treatment
In response to this issue, crypto companies have increased lobbying efforts to receive more favorable treatment for crypto assets from lawmakers. For example, Binance spent almost $1 million on Washington lobbyists in 2022 alone in order to protect its interests from government regulation and interference.
Legal Troubles Continue
Binance continues to experience legal troubles within the United States as it struggles to find banking partners who are willing work with them given their regulatory issues. As a result, some American customers have reported issues with withdrawals from their accounts on the platform which may be further exacerbated if they cannot find new banking solutions soon enough or if they face additional sanctions from regulators or law enforcement agencies in other countries where they operate services or products related to cryptocurrencies or blockchain technologies such as Initial Coin Offerings (ICOs).
The future of Binance’s business activities within the United States is uncertain at this point given their continued legal issues and lack of banking partners willing work with them due to regulatory risks associated with cryptocurrencies or blockchain technologies like ICOs . As such, it remains unclear how much longer they will be able continue operating without facing further sanctions or penalties from either regulators or law enforcement agencies both domestically and internationally alike.