Binance Holdings Ltd., the world’s largest cryptocurrency exchange, and its CEO Changpeng Zhao, are facing a lawsuit from the US Commodity Futures Trading Commission (CFTC) over alleged violations of trading and derivatives regulations in the US.

The lawsuit was filed by the CFTC on Monday in a federal court in Chicago. According to the derivatives regulator, Binance did not properly register with the CFTC, and thus shirked its obligations. The CFTC has been investigating Binance since at least 2021, specifically whether it failed to prevent US residents from buying and selling cryptocurrency derivatives. Generally, CFTC rules require platforms to register with the agency if they allow Americans to trade these products.

The CFTC is not the only US body that has been scrutinizing Binance’s activities. The Internal Revenue Service and federal prosecutors have been examining the exchange’s compliance with anti-money laundering rules. Meanwhile, the Securities and Exchange Commission has been investigating whether Binance has facilitated the trading of unregistered securities.

This lawsuit marks a significant development in the ongoing regulatory scrutiny faced by Binance, which has already prompted the exchange to impose limits on certain transactions for US customers. It remains to be seen how the lawsuit will proceed and what implications it may have for Binance and the wider cryptocurrency industry.

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