U.S. Regulators Accuse Binance Of “Wilful Evasion” In Lawsuit

Binance, the world’s largest cryptocurrency exchange, and its CEO Changpeng Zhao (CZ) were sued by the U.S. Commodity Futures Trading Commission (CFTC) on Monday for “wilful evasion” of regulatory compliance. The CFTC’s lawsuit alleges that Binance is running an unregistered derivatives trading operation and directing American customers to evade compliance controls through leveraging VPNs. In response, CZ denied such claims, emphasizing Binance’s “best-in-class” compliance technology, processes to block American users, and their commitment to being transparent and cooperating with regulators worldwide. This lawsuit comes amid an increasingly high-profile crackdown on crypto firms in the United States; its result will have a considerable impact on the industry’s direction.

TerraUSD Founder Do Kwon’s Troubles Continue

Do Kwon, the founder of the failed stablecoin TerraUSD and its sister token Luna, has been charged with fraud by US prosecutors after being arrested in Montenegro last week. Kwon is facing eight counts of fraud over his management of Terraform Labs, which was responsible for the collapsed digital currencies. Kwon’s location had been unknown since late 2021 when South Korean authorities issued an arrest warrant for him and other company executives. Kwon’s cryptocurrencies triggered a market meltdown last year, causing over a $60 billion crash. It is unclear whether Kwon will face extradition to the US or undergo trial in South Korea.

Coinbase Receives Wells Notice From SEC On Future Enforcement Action

The US Securities and Exchange Commission (SEC) notified Coinbase last week of its plans to undergo enforcement action against the largest US-based cryptocurrency exchange regarding components of its exchange Coinbase Earn and Coinbase Wallet. As for now, the company’s business services will continue to operate as usual, with the chief legal officer stating that the firm is prepared to fight the SEC in court, if necessary. The SEC has intensified warnings over many tokens offered by cryptocurrency companies, classifying them as securities and how such trading platforms should register with the agency.

Crypto Companies Seeking Better Regulatory Climates Than United States

According to a Consensus Magazine feature, cryptocurrency firms in the United States are contemplating moving overseas to more favourable regulatory jurisdictions amid regulatory crackdowns and uncertainty in the country. Ripple’s CEO has stated that the crypto industry has already begun to shift from the US, while Circle, the issuer of the USDC stablecoin, has announced plans to open an office in Paris. Due to regulatory uncertainty, the largest US-based crypto exchange, Coinbase, is also considering launching an overseas trading desk. Crypto-focused lawyer Jason Gottlieb confirms that people are leaving, with many young entrepreneurs deciding to work in countries such as Portugal, Singapore, and the Caymans.