It should be noted that the allegations against cryptocurrency exchange Binance are quite serious. First of all, the platform allegedly provided access to cryptocurrency derivatives for US residents, which cannot be done without CFTC registration. A similar claim was received by BitMEX cryptocurrency exchange in 2020, which resulted in a total fine of $30 million.

The exchange also allegedly ignored laws required to prevent money laundering and terrorist financing. However, this is hard to believe, as Binance was among the first major cryptocurrency platforms to introduce mandatory identity verification in the summer of 2021. Other details on the case are described in a separate article.

According to the CFTC, the lawsuit against Binance was more than justified.

What cryptocurrency exchange Binance is accused of

The regulator accuses the exchange and its founder of allegedly violating laws that prohibit offering futures transactions to US residents without proper registration as a futures derivatives trader, as well as poor compliance with other regulations. Here’s Bannam’s commentary on the matter.

It seems to have been a pretty clear case of evasion of the law. We needed to step in and do it as quickly as possible because this is a prolonged fraudulent scheme that has been running since 2019. There has been a violation of the Commodity Exchange Act all this time.


Clarifying the need to intervene quickly in a "fraudulent scheme" that has been running since 2019 sounds rather ridiculous. In addition, Binance chief executive Changpen Zhao said in response to the lawsuit that the exchange had been cooperating with the regulator in question for at least two years. Accordingly, earlier representatives of the agency "fraud" didn't bother much, but now it has been recalled.


According to Coindesk sources, Banam is fully confident in his prospects of achieving his goals in the Binance case. Recall that in the lawsuit against the exchange, the CFTC has cited the correspondence between CEO Changpen Zhao and other members of the trading platform’s management. These emails contain alleged evidence of regulatory evasion, prohibited preferential treatment of VIP customers and more.

Banam highlighted another point of accusation: according to him, Binance employees allegedly encouraged some customers to actively use VPNs to hide their real locations. It is suspected that the exchange may have collaborated with important US customers in this way.

The US has its own specific rules for customer service on the part of crypto exchanges. This is why many major trading platforms have separate US affiliates that are almost completely independent of the main exchange providing services globally in terms of the law.

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However, the US arm of the Binance.US exchange has also come under pressure, as the US Department of Justice has now applied to block the sale of the bankrupt Voyager platform’s assets in favour of the trading platform. It will be recalled that Voyager Digital filed for bankruptcy last July amid a prolonged crisis in the crypto market.

Already in December 2022, Binance.US offered a deal to buy the platform's assets worth $1.02 billion. This was the most lucrative offer for Voyager, and it was due to be sold in the coming months.

However, on 17 March 2023 the US Department of Justice filed a lawsuit to freeze the deal. Voyager Digital’s lawyers challenged the request a few days later but the bankruptcy court ruled in favour of the government. Here’s a quote from Judge Jennifer Rearden’s ruling, cited by Cointelegraph.

After considering the written arguments of all parties, as well as deliberations and oral arguments on the matter, I hereby grant the government’s emergency motion.

Prior to this, US regulators had made repeated attempts to stop the deal. In addition to the DOJ, the US Securities and Exchange Commission (SEC) had alleged in a March 15 lawsuit that Voyager’s bankruptcy plan would entail fraud, embezzlement or tax evasion. However, this claim was later rejected by Justice Michael Wiles.

Voyager’s official committee of unsecured creditors said in a March 27 tweet that they would “continue to aggressively oppose government action”. Lawyers are awaiting a more detailed court ruling on the case. It is likely to be challenged again.

As you can see, government agencies and regulators in the United States are continuing to put sticks in the wheels of large crypto firms even after their bankruptcy. Those who have already suffered losses after the collapse of Voyager will suffer the most from this decision. Investors clearly need quick compensation, not lectures from lawyers.


And sometimes investors cannot expect the full amount of the compensation. The liquidators of the trading company Alameda, which is not particularly comfortable with blockchain platforms, come to mind here. Because of this, they took it upon themselves to liquidate collateral in certain old company positions, which led to the liquidation of the positions themselves. As a result, the amount of losses due to such actions is already in the millions of dollars.



We think the lawsuit against cryptocurrency exchange Binance is a rather strange initiative. Firstly, the platform has been cooperating with this regulator for more than two years, during which they had no problems. Secondly, many of the claims against the exchange relate to events from an early period, when the platform did not yet have mandatory identity verification, which does prevent fraud activity. Accordingly, the platform's situation is hardly dire, so its management is probably in a position to agree to a trial.