There was clear documentation of Binance's intent to evade the law, said U.S. Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam in a CNBC appearance on Tuesday.
The CFTC on Monday sued Binance and CEO Changpeng Zhao, alleging they knowingly offered unregistered crypto derivatives products. The regulator is charging the exchange and its founder with allegedly violating laws against offering futures transactions, failing to register as a futures commissions merchant and poorly supervising operations, among other things.
"This seemed to be a pretty clear case of evasion and something that we needed to step in aggressively with and do it as quickly as possible because this was an ongoing fraud – going back to 2019 – and ongoing violation of the Commodity Exchange Act," Behnam told CNBC.
“We feel pretty confident in this case, obviously something that we care about deeply and that we've been on top of for several years in this crypto space,” Behnam added.
Court documents filed on Monday contained internal chats from Binance, including one from Samuel Lim, the exchange’s chief compliance officer through January 2022. “On the surface we cannot be seen to have U.S. users but in reality we should get them through other creative means," Lim allegedly said.
Behnam also referred to charges that there was clear communication from Binance to clients encouraging them to use virtual private networks (VPN) to conceal their true location in order to access global markets online.
“Not having a headquarters, not having a location is not going to prevent the CFTC from coming after you,” Behnam told CNBC.
In a blog post on Monday, Zhao called the lawsuit "an incomplete recitation of facts," though he didn't directly address any of the allegations.
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