Among the charges against Binance, these 9 are jaw-dropping!

After being surrounded and prosecuted by five major US government departments, what US regulations did Binance, the world's largest cryptocurrency exchange, violate?

On Monday, March 27, Eastern time, the U.S. Commodity Futures Trading Commission (CFTC) announced a lawsuit against Binance CEO Changpeng Zhao, accusing Binance of "doing its best to" doing business with U.S. customers in violation of U.S. regulations.

In its indictment, the CFTC listed a series of alleged crimes for Binance, such as failing to register with regulators, instructing customers to use VPNs to mask their real locations, and obscuring the locations of headquarters and branches, dating back to a time when the unlawful application of cryptocurrencies led to the wild growth of cryptocurrencies.

In response to Monday's action, a Binance spokesperson called the CFTC's lawsuit "unexpected and disappointing," saying the exchange has made great strides in strengthening compliance, has been working with regulators and will continue to work with authorities in the U.S. and elsewhere.

In a separate blog post, Changpeng Zhao said the CFTC's complaint "appears to contain an incomplete statement of fact, and we disagree with the characterization of many of the issues alleged in the complaint." Changpeng Zhao has repeatedly declared to the outside world that Binance has always firmly followed the road of compliance.

CFTC: Binance does everything it can to avoid complying with U.S. regulations

Here are nine of the CFTC's most jaw-dropping allegations against Binance:

1) Wherever Changpeng Zhao goes, Binance goes

The lawsuit alleges that Binance deliberately ambiguously ambiguized where its headquarters were located, and Changpeng Zhao often said that wherever he was, it was Binance's headquarters.

2) Whatever you do, don't let anyone know you're American

According to the CFTC, Binance advises its high-value U.S. customers to log into their accounts using a virtual private network (VPN) to mask their real location. Binance also does not generally require these customers to provide any identification documents required by U.S. law.

3) Complete disregard for U.S. law

The lawsuit alleges that although Binance's largest customer base is in the United States, it has never registered with U.S. regulators and completely disregards U.S. law.

4) Imply that customers circumvent regulation

According to the lawsuit documents, Binance will warn VIP customers if they are investigated by law enforcement and if their customer accounts are frozen or unfrozen. Binance will also ask the account advisor to contact the client immediately. But if the account is unfrozen, Binance asks advisors to "don't tell users directly to run the account, just tell them that the account has been unfrozen and investigated by XXX." If the user is a large trader, or a smart trader, he/she can understand the intention."

5) Insider Trading

According to the regulator, Binance quietly operates about 300 of its own accounts on its own exchange, which could affect cryptocurrency prices without customers' knowledge. In addition, traders such as Merit Peak and Sigma Chain are exempt from Binance's anti-fraud and insider trading policies.

6) Behind the burning after reading

The lawsuit alleges that Binance executives often use social apps such as Telegram and SIgnal to communicate internally and with customers.

7) Ownership "Labyrinth"

The CFTC alleges that Binance used a "maze" of ownership structures to deliberately obfuscate where each entity operates, making it challenging for regulators to exercise jurisdiction.

8) Everything comes from above

Regulators say that while Mr. Zhao runs a multibillion-dollar business, he makes decisions personally on even trivial matters, such as personally approving a $60 million office furniture fee in the month Binance achieved $700 million in revenue.

9) There are whales hidden in the room

Regulators discovered that a Chicago-based company controlled about 12 percent of Binance's trading volume, and Changpeng Zhao urged them to use non-U.S. IP addresses to do business on exchanges.

The biggest target for U.S. regulators

In last year's currency circle war, Changpeng Zhao defeated the "currency circle Musk" SBF in one fell swoop, and Binance's influence reached a new level, equivalent to controlling this $1.1 trillion industry. But it also means that if something happens to Binance, the consequences will likely be more serious than FTX.

After the CFTC lawsuit, the decline of cryptocurrencies accelerated across the board, with bitcoin falling more than 4% at one point, cryptocurrency-related stocks tumbling intraday, and Coinbase falling nearly 11% intraday.

In fact, Binance is the biggest target of all crackdowns by U.S. regulators.

According to crypto data firm CoinGecko, Binance token BNB is currently the fourth largest token in the world, with a total value of about $62 billion.

According to crypto data firm Kaiko, Binance has accounted for about 70% of all trading volume in the spot market so far this month, while Coinbase Global has only 6%.

According to a report by CoinGecko, Binance controlled a record 62% of global trading volume in 2022 among the perpetual futures of CoinGecko's derivatives. In contrast, Kaiko data shows that Binance's share of spot trading in the U.S. has been smaller over the past year, at nearly 7%.

The crackdown has also spread to others, including U.S. exchange Coinbase Global, TRON founder Justin Sun, to cryptocurrency tycoon Do Kwon.

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