Washington, D.C. — Today, the Commodity Futures Trading Commission (CFTC) filed a civil enforcement action against Binance and top executives Changpeng Zhao, former CEO, and Samuel Lim, former Chief Compliance Officer. The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, accuses the defendants of numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations.
According to the complaint, Binance Holdings Limited, Binance Holdings (IE) Limited, and Binance (Services) Holdings Limited (collectively referred to as Binance) operated the Binance centralized digital asset trading platform through an intentionally opaque common enterprise, with Zhao acting as the owner and CEO. The defendants allegedly chose to disregard applicable provisions of the CEA to engage in regulatory arbitrage for their commercial benefit.
The CFTC seeks disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations. CFTC Chairman Rostin Behnam stated that the action demonstrates the CFTC’s commitment to protecting American investors and its intention to enforce compliance in the digital asset market.
Gretchen Lowe, CFTC’s Enforcement Division Principal Deputy Director and Chief Counsel, emphasized that the defendants’ alleged willful evasion of U.S. law lies at the heart of the Commission’s complaint. The lawsuit accuses Binance of having an ineffective compliance program and, under Zhao’s direction, instructing employees and customers to circumvent compliance controls to maximize profits