Binance lawsuit will not end with CFTC alone[Opinion]| coindesk JAPAN | Coindesk Japan

Coinbase, Binance, Justin Sun, Do Kwon, and even Custodia…. This week has been full of news. And most of them are American.

But the most interesting one is Binance. Not just what happened (the Commodity Futures Trading Commission sued), but what didn’t happen (the Justice Department didn’t). In addition, the Commodity Futures Trading Commission (CFTC) Technical Advisory Board met on March 22.

overview

On March 27, the CFTC announced that Binance, founder Changpeng Zhao, and several other organizations would be offered a “futures commission” while offering unregistered crypto derivatives options to American customers. merchant: FCM)”.

why it matters

The lawsuit is rather shocking and shows that Binance was working hard to circumvent US regulation. The CFTC’s lead attorney, Gretchen Lowe, described Binance’s actions as “deliberate circumvention of U.S. law.” But these are just allegations that have not yet been proven in court.

Zhao responded on Monday that the complaint contained an “incomplete enumeration of facts.”

serious suspicion

However, questions remain. Is this a big deal for Binance? From here on out, it’s just speculation, so read with that in mind.

The answer would be YES. The content of the CFTC lawsuit itself is not the reason. The CFTC could impose fines or ban Zhao from becoming a futures trading executive. If Zhao is interested in becoming an executive.

The CFTC’s complaint will have a strong impact on crime and sanctions-related issues.

Some of the content of the complaint, including that Binance was aware that sanctioned groups, such as the Palestinian militant group Hamas, were trading on Binance but didn’t believe it was a major issue, was part of the complaint. And would be in conflict with the Treasury Department’s Office of Foreign Assets Control rules.

“(Former Chief Compliance Officer of Binance) Samule Lim explained to colleagues that terrorists usually transfer ‘small amounts’ because ‘large amounts amount to money laundering,’” the complaint reads. is written.

“A colleague of Lim responded, ‘For $600, you can barely buy an AK47 (automatic rifle). In it, he admitted, ‘I know that, they’re using it for crime.’ , close your eyes.” (CFTC Complaint)

The complaint also emphasized that Binance used American services for its business, citing Google Suite, Webex, WeWork and Amazon Web Services (AWS) as examples.

“Services purchased by Binance from Amazon Web Services and provided to Binance in the United States include ‘AWS CloudFront,’ which, according to Amazon Web Services, is a ‘global content delivery network,'” the complaint reads. there is

Binance’s use of AWS in Japan was previously known when the outage of AWS affected Binance several years ago.

Department of Justice

The final piece of the puzzle is the Department of Justice’s response. It’s instructive to see how the Justice Department has so far pursued companies and websites allegedly involved in distributing ransomware and offering “paid cyberattack services.”

In such cases, the US government will seize the domain. Users will no longer be able to access the service.

So if the U.S. truly believes that Binance is a criminal organization, the conditions are already in place to shut down Binance.

For the record, there is no immediate information that the Department of Justice or the Office of Foreign Assets Control will take any action regarding Binance.

But, as we’ve seen with Terraform Labs founder Do Kwon and FTX founder Sam Bankman-Fried, the DOJ sometimes makes public statements until suspects are apprehended. It is also possible that they are just waiting for a secret indictment that will not be filed.

｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
| Image: Nikhilesh De/CoinDesk
｜Original: That Binance Suit Sure Seems Bigger Than Just a CFTC Case