The Commodities Futures Trading Commission’s enforcement action against Binance could shutter the crypto behemoth if the regulator’s requests for injunctive relief and penalties stick—but there’s a lot more to the Commission’s lawsuit to unpack.

The CFTC filed its lawsuit against Binance on Monday morning, which the company has said was “unexpected and disappointing,” citing its ongoing cooperation with regulators. The company also said in its statement that it has invested heavily in its compliance team “to ensure we do not have U.S. users active on our platform.”

The lawsuit alleges that Binance committed multiple trading derivatives violations, including not being properly registered to offer derivatives to U.S. clients, not adequately supervising activity on its exchange, insufficient anti-money laundering (AML) and know-your-customer (KYC) controls, knowingly evading or helping U.S. clients evade regulators, and perhaps most damning: trading against its own customers.

Zhao himself is specifically named as a defendant in the CFTC lawsuit along with Binance Holdings Limited (registered in the Cayman Islands), Binance Holdings (IE) Limited and Binance (Services) Holdings Limited (both registered in Ireland), and ex-chief compliance officer Samuel Lim.

Zhao dismissed the 74-page complaint as “FUD” (a popular crypto acronym for fear, uncertainty, and doubt) by writing “4” on Twitter Monday.

At the start of the year, he said “4” would be his shorthand for telling followers to “

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Author: Stacy Elliott

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