The cryptocurrency industry is dealing with a high turbulence of regulatory challenges launched by the top financial watchdogs. The prominent crypto leaders are also facing the legal heat as in the recent events Binance’s former CEO Changpeng Zhao pleaded guilty in the wake of charges against him and the crypto exchanges. However, it seems like this might just be the beginning of many such cases to come ahead.
CFTC to intensify scrutiny
According to reports, US Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero in an event stated that “access to US customers is a privilege, not a right.” She asserted that the CFTC will continue its aggressive approach toward crypto exchanges that are violating trade laws in the country.
CFTC Commissioner brought up the use of VPNs (Virtual Private Networks) or several other methods that are used to dodge Know Your Customer (KYC) rules will not be tolerated.
CFTC Commissioner Caroline D. Phamda in a stern warning asserted that the watchdog’s jurisdiction knows no border. This implies that the commission will pursue non-U.S. entities involved in regulatory breaches.
Crackdown on violations
US CFTC had played a major role in pursuing claims against Binance, specifically for granting access to users to trade unregistered crypto derivatives. In a release, CFTC highlighted that CZ and Binance agreed to a proposed consent order by the agency. The authority also brought up that Samuel Lim, the former Chief Compliance Officer of Binance also agreed to a proposed consent order involving a permanent injunction, civil monetary penalty, and equitable relief.
It is important to note that this crackdown follows a similar action taken in the case of Sam Bankman-Fried (SBF), founder of FTX. SBF is facing seven felony counts which include conspiracy to commit money laundering. SBF has pleaded not guilty. However, he awaits sentencing at New York’s Metropolitan Detention Center. The severity of the charges could result in a maximum sentence of 110 years in prison for the FTX founder.
