The post Binance Vs. CFTC: Binance Faces Uncertainty As CFTC Confirms ‘No Immediate Path Forward’ appeared first on Coinpedia Fintech News
Binance, the world’s largest cryptocurrency exchange, has been facing regulatory challenges in recent months. The Commodity Futures Trading Commission (CFTC) has been investigating Binance over concerns that it may have been operating an illegal derivatives exchange. As the investigation continues, the CFTC has revealed that there is currently no “immediate path forward” for Binance to resolve these concerns.
CFTC Is Looking For A Legal Battle With Binance
In March 2023, Binance was accused by the Commodities Futures Trading Commission (CFTC) of “willful evasion” of the law and operating an illegal digital asset derivatives exchange. CFTC Commissioner Kristin N. Johnson recently discussed the ongoing case in an interview.
In her interview, Johnson emphasized that ongoing litigation issues are typically kept confidential to protect the progress of the case. This is because, in most cases, defendants are presumed innocent until proven otherwise. As a result, the CFTC commissioner refrained from making any prejudgments about what is expected to unfold in the litigation.
However, she stated that no decision had been made on whether to settle the case or take it to court; she hopes to find a “path forward” in the regulator’s legal dispute with Binance. Johnson added that the CFTC has been in discussions with Binance to address the company’s conduct after the regulator filed a lawsuit against Binance, its CEO Changpeng Zhao, and its former chief compliance officer last month.
The suit alleges that the platform allowed users in the U.S. to trade derivatives, despite not being authorized to do so and solicited users through its platform. In an interview with CNBC, Johnson said,
“We’ve been in continuing conversations with the business to describe what we understand is potentially problematic conduct and to give them an opportunity to explain that conduct and to help us find a path forward. As of the moment, we can conclude that there is not an immediate path forward. That doesn’t mean there couldn’t be one, and hopefully, there will be one.”
CFTC May Move Forward With Dodd-Frank Act
According to Kristin N. Johnson, the agency plans to use a provision from the 2010 Dodd-Frank Act in their legal battle with Binance. This provision, which focuses on the anti-evasion principle, prevents entities from conducting overseas business that can attract or solicit US investors. Johnson notes that this is the first time the CFTC will be employing this provision in a case. She said:
“Our reading of what we’ve seen in terms of evidence suggests that the provision could be applicable in context to Binance.”
Coinbase has filed a lawsuit against the U.S. Securities and Exchange Commission, following CEO Brian Armstrong’s promise to take the regulator to court. The exchange is seeking clarity on whether the crypto industry can be regulated under existing securities laws.
CFTC Commissioner Kristin N. Johnson hopes Congress will introduce crypto-specific regulations soon. The industry is currently largely unregulated, but recent events like the FTX exchange implosion and Terra’s stablecoin firm collapse have sparked calls for increased regulation.