CFTC Fines Binance for $850M Outflow, Accuses of Breaking Laws

• The CFTC has issued an indictment against Binance, the world’s largest centralized exchange for digital assets, due to their alleged violation of US financial laws.
• Prior to the CFTC indictment, there was a massive $850 million outflow from Binance.
• Binance CEO Changpeng Zhao has been named as a defendant and is being investigated by the CFTC.

CFTC Cracks Down On Binance

The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance, the world’s largest centralized exchange for digital assets, accusing them of breaking numerous US financial laws including rules intended to prevent money laundering. Furthermore, they have accused Binance of manipulating markets and lacking compliance efforts.

$850 Million Outflow Recorded

Prior to the CFTC indictment, data research conducted by Thanefield Capital revealed that there were large stablecoin withdrawals across centralized exchanges totaling almost $1.5 billion in 12 hours prior to the CFTC announcement – this included a massive outflow of $850 million from Binance alone. This movement of funds could be related to rumors that something significant was going on with the exchange.

Binance CEO Targeted in Lawsuit

Binance CEO Changpeng Zhao has been named as a defendant in the lawsuit and is being repeatedly singled out throughout it by the regulator. In order to gather evidence about his alleged involvement in any wrongdoing at Binance, it is believed that information was collected from text chains and group chats on Zhao’s mobile phone.

Binance Denies Allegations

Binance has rejected many of these allegations and defended its practices – claiming they have made significant investments into ensuring US users are not active on their platform and blocking those who are identified as American citizens or residents or those with a US mobile number. They also insist they intend to continue cooperating with regulators worldwide in order to develop a transparent regulatory framework around cryptocurrencies.

Conclusion

It remains unclear what will come next following this indictment but it does appear that action is being taken against cryptocurrency exchanges which fail to abide by regulations set forth by governments across the world when it comes to trading digital assets