Binance Faces Charges from CFTC for Crypto Derivatives, Promotes VPN Use to Avoid Detection in the US

Binance is now the center of a new controversy, with new charges from the United States Commodity Futures Trading Commission (CFTC). This adds a new lawsuit put up against the world's largest cryptocurrency exchange platform, centering on its failure to register crypto derivatives despite its operations in the country.

It was initially claimed to be available for countries outside the US only, but allegedly, the company promoted the use of VPNs to help access it and hide it from authorities.

Binance Faces Charges from CFTC for Unregistered Crypto Derivatives

The CFTC has charged Binance with violations of the Commodity Exchange Act (CEA) and CFTC regulations, the agency said on Wednesday.

It centers on civil enforcement action against its CEO, Changpeng Zhao, and three entities that operate Binance.

Also charged with these violations is Samuel Lim, who is the company's former Chief Compliance Officer.

The company allegedly allowed the operations of its unregistered crypto derivatives including that of Binance futures, which need to have it registered under the United States' CFTC.

Binance Allegedly Promoted VPN Use to Hide US Transactions

According to a report by The Verge, the company promoted the use of Virtual Private Networks to US-based customers to trade its derivatives, keeping the transactions secret to the US regulator. Additionally, what puts the nail in Binance's coffin, in this case, were written records from its executives, allegedly explaining their illicit actions.

Moreover, these are regarded to be "biz decisions," or business decisions that Binance carried out illegally in the country.

Binance and its Lawsuits, Problems with Regulators

Several reports and claims on legal proceedings against Binance center on their many under-the-table hands, relating to illicit activities done by the platform. There was one report which points to Binance being involved in the infamous Bitzlato, the company which allowed money laundering scams to take place in its systems, receiving as much as 700 million USD in Bitcoin to pass.

The company also allowed Iranian transactions to pass through its systems, and this is despite the clear US sanctions against the country for any businesses via its crypto platform. Binance paved the way to as much as $8 billion on its crypto exchange platform in 2018 after Iran has been cut off from the world banking system.

Binance has had several run-ins with the law and crypto regulators in the past, with the company already in several legal troubles as we speak. The CFTC complaint is only one of the many problems Binance is facing at the present, as it also has a charge from the Securities and Exchange Commission over its BNB token for possible insider trading.