Crypto Exchanges: US CFTC Warns Crypto Exchanges, Says Binance Is Just the Beginning

US CFTC Warns Crypto Exchanges, Says Binance Is Just the Beginning

November 24, 2023

Bhushan Akolkar

Senior Journalist

Expertise : Cryptocurrency, Blockchain, Macro Finance

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.   He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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Two days after Binance’s $4.3 billion settlement announcement with regulators, the US CFTC has issued a stern warning to other crypto exchanges hinting at similar action ahead.

US CFTC on Binance

On Tuesday, Changpeng Zhao (CZ) admitted guilt and stepped down as CEO. Binance shall settle fines exceeding $4.3 billion, with $50 million contributed by the former CEO. Part of this sum will address allegations raised by the Commodity Futures Trading Commission, related to Binance permitting U.S. customers to engage in trading unregistered cryptocurrency derivatives.

Speaking on the development further, CFTC Commissioner Christy Goldsmith Romero added: “There are no pirate ships in US markets” and that “access to US customers is a privilege, not a right.”

Goldsmith emphasized the CFTC’s commitment to maintaining a robust approach against crypto exchanges that breach trading regulations. He highlighted a zero-tolerance policy for tactics such as VPN usage or any attempts to evade KYC rules, including superficial pop-up queries asking users to confirm they are not located in the U.S.

In a distinct statement, CFTC Commissioner Caroline D. Pham affirmed the CFTC’s global jurisdiction, stating unequivocally that the regulatory body will persist in its efforts against non-U.S. entities.

Learning from FTX’s Episode

Soon after the development, Binance founder Changpeng Zhao stepped down as the CEO with Richard Teng taking over his position. CZ also meets the same fate as that of his rival and disgraced FTX founder Sam Bankman-Fried, and is facing charges of breaching the US anti-money-laundering laws. However, CZ is currently out of custody on a $175 million bond with the final hearing scheduled in February 2024.

The prompt decision follows an extended legal case involving FTX founder SBF, who entered a not-guilty plea to seven felony counts. This also included conspiracy to commit money laundering. SBF is currently held at New York’s Metropolitan Detention Center, anticipating sentencing, with the potential for a maximum prison term of 110 years.

Just a month back, Binance filed for dismissing all accusations by the US CFTC. However, these developments have given the regulator a chance to pursue further action against other exchanges.