The leading cryptocurrency exchange by trading volume, Binance, and its CEO Changpeng Zhao were sued Monday by the Commodity Futures Trading Commission (CFTC).

The U.S. regulator alleged that Zhao and his company violated trading and derivatives rules, according to a lawsuit filed by the CFTC in a Chicago federal court.

The two largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, fell on the news, according to CoinGecko. Over the past hour, Bitcoin had fallen 3.3% to $26,800, and Ethereum had stumbled 2.9% to under $1,700.

Zhao responded to the lawsuit’s announcement by tweeting “4,” alluding to a tweet he made in January that connects the number to “Ignore FUD, fake news, attacks, etc.”

The lawsuit alleges that Binance has operated a facility for trading digital asset derivatives in the U.S. since at least July 2019, allowing residents to trade futures, swaps, and options on cryptocurrencies including Bitcoin, Ethereum, and Litecoin.

Binance also made attempts to grow its footprint in the U.S. despite claims that the exchange would prevent U.S. residents from accessing Binance’s platform, the lawsuit claims.

“Binance has taken a calculated, phased approach to increase its United States presence despite publicly stating its purported intent to ‘block’ or ‘restrict’ customers located in the United States from accessing its platform,” it states.

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Author: André Beganski

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