According to AFP, US authorities on Monday filed a lawsuit against Binance, the world’s largest cryptocurrency trading platform, and its chairman, Zhang Bing Zhao, on charges of willful violation of US laws.
And the “Derivatives Regulatory Authority,” in its lawsuit in federal court in Illinois, specifically sought to block the registration and sale of certain financial products in the United States.
Ruston Benham, head of the authority, said the allegations against Finance were part of a campaign to “expose and stop wrongdoing in the volatile and risky digital asset market”.
The charges include Zhang Pingzhao and three companies that make up his cryptocurrency empire.
Zhang Bing Zhao, often seen as the biggest rival to FTX cryptocurrency trading platform founder and former chairman Sam Bankman-Fred, was arrested in the Bahamas in December and will appear in US criminal court later this year. AFP.
According to the Washington Post, Finance responded that the allegations were “unexpected and disappointing,” especially since the agency has been working with the authority for more than two years.
“However, we intend to continue to cooperate with authorities in the United States and around the world,” the company said.
“Over the years, the Finance, Derivatives Regulatory Authority has been known to be in breach of its rules, actively working to prevent the flow of funds and avoid compliance,” Benham said in a statement.
“This should be a warning to anyone in the digital asset world that the Derivatives Regulatory Authority will not tolerate willful violations of US laws,” he added.
The indictment includes allegations that Finance did not comply with the standards required of a company operating as a derivatives market.
The report noted that “Binance’s compliance program has been inactive” since July 2019.
The authority noted that finance staff and the company’s customers were directed by Zhao’s orders to avoid compliance regulations “in order to increase the company’s profits.”
For its part, the company told the Washington Post that it had made “significant investments” to ensure that US users could not use its site.
Cryptocurrencies tumbled on Monday, CNBC reported, as the regulator filed a lawsuit against the financiers.
During that time, the price of bitcoin fell 3 percent to $26,955.61 and ether fell 3.5 percent to $1,704.56, CNBC reported.
At a time when the global banking crisis is affecting the traditional banking sector and its stocks and bonds, Bitcoin seems to be “a safe haven right now,” as Reuters puts it.
However, regarding this safe haven alternative to banks and traditional banks, in the presence of individuals or governments, economists disagree, some believe it represents a revolution and its use should be generalized, while others fear its instability and questionability. Its ability to outperform traditional banks.
Despite Bitcoin’s rise in March, it slowed last week, according to CNBC quoted experts, and Monday’s decline was largely driven by the lawsuit against the finance company, and any U.S. action against it could have major implications for the sector.
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