• The Commodity Futures Trading Commission (CFTC) has accused Binance of trading violations, obscuring the location of its executive offices, and refusing to respond to subpoenas.
• Binance CEO Changpeng Zhao rejected all allegations, claiming that it only trades to convert crypto revenue.
• In response to the CFTC’s complaint, MakerDAO passed a new “constitution” to formalize governance processes and prevent hostile actors from taking over the protocol.
CFTC Allegations Against Binance
The United States Commodity Futures Trading Commission accused world’s largest crypto exchange Binance and its CEO Changpeng “CZ” Zhao of trading violations. According to the lawsuit filed by CFTC, Binance has conducted transactions for U.S. customers without proper registration since at least 2019. Moreover, CFTC alleged that the exchange kept this information a “top secret,” and refused to respond to investigative subpoenas seeking information on its trading activity. CZ rejected all allegations but this complaint has already triggered several major reactions like federal judge temporarily halting its deal to purchase Voyager Digital for $1 billion after US government requested emergency stay and three American investors filing $1 billion lawsuit against the exchanges for alleged involvement in trading unregistered securities promotions by influencers.
MakerDAO Passes New Constitution
In response to CFTC’s complaint against Binance, MakerDAO which governs Dai DAI stablecoin protocol passed a new proposed “constitution” with different categories of participants with different powers and responsibilities in order to formalize governance processes and help prevent hostile actors from taking over the protocol.
Binance Rejects Allegations
Binance CEO Changpeng Zhao rejected all allegations made by Commodity Futures Trading Commission regarding unlawful activities like trading without proper registrations or keeping information top secret etc., He argued that while Binance “trades” in some situations, this is mainly done just for converting crypto revenue into fiat or other cryptocurrencies rather than making profits or manipulating markets under any circumstances.
Repercussions Of The Complaint
The complaint launched by CFTC had severe repercussions on world’s largest crypto exchange as a federal judge temporarily halted its deal worth $1 billion after US government requested an emergency stay followed by three American investors filing $1 billion lawsuit against them alleging their involvement in unlawful promotion activities by influencers as well as trading unregistered securities activities.