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Aggressive, Expanded Scrutiny Leave Crypto Firms in Limbo

The head of the US Commodities Futures Trading Commission said last week that activity on the exchange Binance constituted a "very clear example of evasion," calling for swift and forceful action from American authorities.

Image: Agence Olloweb / Unsplash

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The Commodity Futures Trading Commission (CFTC) chairman said regulators needed to step in aggressively after the US authorities sued Binance, the largest cryptocurrency exchange, on Monday.

In an interview with CNBC, CFTC chairman Rostin Behnam said, "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 said that Binance was a global consortium of several companies and noted, "not having a headquarters, not having a location is not going to prevent the CFTC from coming after you."

According to Benham, evidence showed that Binance CEO Changpeng Zhao had the authority to make illegal decisions for the company.

He added, "so we're going to vigorously continue and fight this case in court."

Expanding Regulators' Push to Rein in the Crypto Industry

US markets regulator sued crypto firm and several executives for registration failures, in what is seen as an aggressive crackdown on the digital assets world.

The US Securities and Exchange Commission (SEC) said that the Chicago-based business behind Beaxy and its affiliates acted as an exchange, broker, and clearing agency without being properly registered.

The head of the SEC has spoken out against this industry-wide framework, citing potential conflicts of interest and investor harm.

Wednesday's civil accusations followed Beaxy's announcement the day before that it would immediately discontinue services due to the uncertain regulatory climate around the crypto business.

Artak Hamazaspyan, the company's creator, was also accused of generating US$8 million in an unregistered offering of the token BXY and misappropriating at least US$900,000.

SEC chair Gary Gensler said in a statement, "this case serves as yet another reminder to crypto intermediaries that their business models must comply and adapt to the law, not the other way around."

US prosecutors and authorities have widened their crackdown on suspected abuses in the digital asset business with the allegations filed in Chicago federal court.

The CFTC filed a lawsuit against Binance on Monday, accusing the largest cryptocurrency exchange in the world of breaking regulations meant to curb unlawful activities.

New York authorities have charged Sam Bankman-Fried, the founder of the defunct cryptocurrency exchange FTX, with fraud and Chinese bribery.

The SEC said on March 22 that it had uncovered a potential securities law breach at Coinbase Global and was considering filing a lawsuit.

On Wednesday, the SEC took action against Windy Inc. and its founders, Nicholas Murphy and Randolph Bay Abbott, for doing unregistered business on Beaxy's platform.

Brian Peterson, another individual, was suspected of being an unlicensed dealer as he helped Beaxy with their advertising.

Windy, Murphy, Abbott, and Peterson reached settlements and agreed to pay fines without admitting guilt.

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