cftc

Breaking: Binance and CZ sued by CFTC over US regulatory violations

The cryptocurrency exchange and its founder, Changpeng Zhao, have allegedly violated trading and derivatives rules.

The United States Commodity Futures Trading Commission (CFTC) has filed suit against Binance and CEO Changpeng “CZ” Zhao for trading violations, according to a Bloomberg report. The suit was filed in the U.S. District Court for the Northern District of Illinois.

According to the CFTC, Binance failed to meet its regulatory obligations by not properly registering with the derivatives regulator. The cryptocurrency exchange has been the focus of a CFTC investigation since 2021. The exchange acknowledged in February that it would likely face regulatory action in the United States and was already working with regulators.

In addition to the CFTC, Binance has been under investigation by the Internal Revenue Service and federal prosecutors, who have examined the exchange’s adherence to Anti-Money Laundering rules. Meanwhile, the Securities and Exchange Commission has been investigating whether Binance allowed U.S. traders to access unregistered securities. 

Binance is the biggest cryptocurrency exchange with over $8.5 billion trading volume daily.

The price of Bitcoin (BTC) has plummeted since the announcement, falling from $27,781 at 13:45 UTC to $26,755 in an hour and 15 minutes. 

The suit claims Binance conducted transactions in Bitcoin (BTC), Ether (ETH) and Litecoin (LTC) for persons in the United States since at least 2019 despite a policy of blocking or restricting U.S. customers. The company and its executives intentionally violated U.S. law, the suit said:

“All the while, Binance, Zhao, and Lim, the platform’s former Chief Compliance Officer (“CCO”), have each known that Binance’s solicitation of customers located in the United States subjected Binance to registration and regulatory requirements under U.S. law.”

According to the suit, Binance obscured the location of its executive offices, as well as the “identities and locations of the entities operating the trading platform.” The suit cites an internal Binance memo in which CZ stated that the purpose of that policy was to “keep countries clean [of violations of law]” by “not landing .com anywhere. This is the main reason .com does not land anywhere.”

Binance employs at least 60 people in the United States, “and that number continues to increase,” the CFTC said in the suit. It also holds U.S. trademarks. Binance launched Binance.US arm in 2019.

Related: Binance employees allegedly help customers in China bypass KYC controls

Among other charges made by the CFTC are the claims that Binance failed to register with the regulator and violated provisions of the Commodities Exchange Act and CFTC regulations, including legally mandated implementation of Anti-Money Laundering and Know Your Customer (AML/KYC) controls.

In addition, the defendants failed to supervise the company’s activities adequately and willingly conducted activities beyond U.S. borders to evade the U.S. Commodities Exchange Act and took other actions to evade regulation:

“Zhao and others acting on behalf of Binance have used Signal—with its auto-delete functionality enabled—to engage in business communications, even after Binance received document requests from the CFTC and after Binance purportedly distributed document preservation notices to its personnel.”

The suits stated that Binance offered leverage to customers trading on the spot market and called two categories of product it offered “futures” and swaps it called “perpetuals.” It allegedly also “traded on its own platform through approximately 300 ‘house accounts’ that are all directly or indirectly owned by Zhao,” as well as through accounts owned by entities Zhao owned or controlled. Binance did not disclose that activity to its customers.

CFTC Global Markets Advisory Committee member Christopher Perkins said in a statement provided to Cointelegraph:

“While it’s too early to opine on the merits of the CFTC case against Binance, we remain supportive of principles-based regulation across the crypto industry.”

The CFTC is pressing seven counts for executing unregistered futures transactions, providing illegal commodities options, failure to register as a Futures Commission Merchant, Designated Contract Market or Swap Execution Facility, failure to supervise diligently or implement AML/KYC measures and law evasion.

White House report takes aim at Bybit — and forgot about Deribit

The White House isn’t doing any favors for derivatives traders by turning a blind eye to the biggest players in the space.

The White House released its annual economic report on March 20, and it dedicated an entire section to digital assets. 

The authors should be commended for doing so. I largely agree with the report’s assessment that certain aspects of the digital asset ecosystem are causing problems for consumers, financial systems and the environment.

However, as a builder in the digital asset space, I cannot disagree more with its conclusion that “crypto assets currently do not offer widespread economic benefits.”

To understand how the White House plans to regulate digital assets, it’s important to examine what was left out of the White House report. A particularly out-of-touch piece of data that made the report was a list titled, “Top Ten Crypto Derivative Platforms by Open Interest.” It included offshore exchanges including BingX, Deepcoin and BTCC Futures.

While most digital asset proponents would agree with the report that these exchanges are not reputable by any means, and open interest is a metric that is trivially easy to manipulate, it’s neither here nor there. The real issue is why the White House report chose to focus on offshore exchanges that have no checks and balances and aren’t even open to United States-based users.

What’s more revealing is the fact that they choose to completely ignore the largest derivatives product that is available to U.S.-based users, one that has been vetted and received approval from the Commodities Futures Trading Commission to launch in a safe and regulated manner: the Bitcoin (BTC) and Ether (ETH) futures offered by the Chicago Mercantile Exchange (CME).

Related: What Paul Krugman gets wrong about crypto

The CME is an entity that is fully compliant with all U.S. laws and regulations and, with the recent launch of the Micro Bitcoin and Micro Ether futures, has made it possible for retail investors to access a safe, regulated and U.S.-based futures derivative product.

Why would they choose to omit the mention of the CME?

Could it be because the CME can only list commodities, putting into question the Securities and Exchange Commission’s position that ETH is a security?

Furthermore, none of the platforms mentioned by the White House have any name recognition among crypto-native investors. While this could be attributed to the fact that there are relatively few derivative exchanges on the market and that none of these exchanges seem to have filled the void left by FTX, another omission is very telling.

The White House report also fails to mention Deribit, the largest options exchange by volume and open interest. Based in the Netherlands but unavailable to U.S. users, the company is focused on education and outreach and is far more transparent than most on the market. So, why was it not included?

The White House is purposefully excluding any legitimate businesses from the list of derivative platforms, a position that is likely taken in order to paint digital assets as shadowy, unsafe assets.

Derivatives, such as futures and options, are a core component of any financial system. The U.S. — and White House — would benefit from a thriving digital asset economy that includes derivatives and options markets. And I do agree that the exchanges listed in the White House report are indeed quite risky.

But what the White House is missing is that there is a better alternative, one that cannot be swept under the rug anymore and one that is transparent, noncustodial, cryptographically secure and fully open-source: decentralized finance (DeFi).

DeFi is fully noncustodial and has no intermediaries, so there are no “entities” to regulate because users are always in control of their funds. In addition, most DeFi uses collateral requirements and limits access to leverage: All lending protocols are overcollateralized, and the balance is instantly auditable, as opposed to fractional reserve banking.

Related: Did regulators intentionally cause a run on banks?

The lack of regulatory clarity from the U.S. SEC and CFTC stifles innovation in the derivatives space.

Most DeFi protocols can and should plan to follow the guidelines of self-regulatory organizations such as the Financial Industry Regulatory Authority to protect all users. Clearly stated regulations have a place in any industry, but regulation by enforcement stifles innovation. I’m seeing this firsthand as a builder in the digital asset space, and the lack of clarity is making it impossible for any U.S.-based entity to even tap into the U.S. market.

Digital asset proponents know about previous financial crises. Most of us lived through the hellscape that unfolded post-2008 due to bank deregulation. Our goal is to rebuild the financial infrastructure from the ground up, in the most transparent and securest way possible. DeFi is backed by mathematically unbreakable encryption, and centralized exchanges based offshore are the shadow banks of this generation.

Builders in the DeFi space want to create the most secure financial system in history. We want to empower citizens of the world, not private banks or runaway financiers.

And despite what U.S. regulators may think, we are willing to work with governments, central banks and regulators. We just need to know you’re arguing in good faith.

Guillaume Lambert is the founder and CEO of Panoptic and an assistant professor in applied physics at Cornell University. His research at Cornell focuses on biophysics. He holds a Ph.D. in physics from Princeton University.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

CFTC’s tech committee gathered in DC to talk DeFi — Here’s what was discussed

DeFi was on the agenda at the CFTC’s tech committee meeting, with crypto execs explaining and discussing the space with the regulator.

The United States commodities regulator received a crash course on decentralized finance (DeFi) on March 22. Crypto executives briefed the regulator on key issues affecting the space, including exploits, decentralization and digital identities.

As part of a scheduled first meeting of the CFTC’s Technology Advisory Committee (TAC) in Washington D.C., members from the crypto space gave presentations to the regular intending to cover critical issues currently impacting DeFi.

CFTC commissioner Christy Goldsmith Romero opened the meeting with prepared remarks, saying “understanding how DeFi works” is “important” as “policy decisions related to DeFi” are currently being made by regulators and lawmakers.

The panel began with an explainer on DeFi and blockchain technology by Ari Redbord, head of legal and government affairs at blockchain intelligence firm TRM Labs.

He outlined the claimed benefits of blockchains, namely transparency, immutability and privacy, saying it could allow regulators to balance the “right to privacy with the need for security.”

Redbord and Nikos Andrikogiannopoulos, the founder of analytics firm Metrika, jointly outlined the benefits and issues currently facing decentralization, concluding that the benefits “far outweigh” the challenges, which they believe will “self-resolve.”

“We’ve reached a point in time where we can no longer ignore decentralization,” Andrikogiannopoulos said. “Not only do we have to embrace it, but I think it’s our duty to lead it in the right direction.”

Redbord highlighted the total value that entered DeFi in the last two years, saying it was “stress tested during FTX […] and did not fail. DeFi is absolutely here to stay.”

DeFi’s total value locked is around $49.1 billion, according to DefiLlama, rising from around $15 billion at the beginning of January 2021.

Carole House, executive in residence of venture firm Terranet Ventures, and Jill Gunter, chief strategy officer of blockchain infrastructure company Espresso Systems, then provided an overview of the current solutions for digital identity and noncustodial wallets, using the examples of the Ethereum Name Service and MetaMask wallet.

Related: CFTC continues to explore digital asset policy considerations in MRAC meeting

Fireblocks founder Michael Shaulov and Trail of Bits founder Dan Guido then presented the exploits and vulnerabilities that have, and continue to, take place in the market.

“All the hacks, they are extraordinarily public, and it’s usually your users and other outside firms that find out about them before you do,” Guido remarked, which he said instills a “need for perfection” in crypto firms.

Throughout 2022, the top 10 exploits in crypto alone saw over $2 billion lost, with DeFi on the receiving end of 113 exploits out of the 167 carried out across the year.

Shaulov then briefly explained the exploits carried out against the Ronin Bridge, BadgerDAO and the recent Euler Finance exploit.

The DeFi portion of the meeting ended with members unanimously voting for creating a Digital Assets and Blockchain Technology Subcommittee.

The subcommittee will focus on the “why of DeFi,” what problems it solves, use cases, vulnerabilities, and proposed legal and policy frameworks.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

CFTC adds execs from Circle, Ava Labs and Fireblocks to tech advisory group

The technology advisory committee aims to assist the CFTC in “identifying and understanding the impacts and implications of technological innovation in financial services and markets.”

The Commodity Futures Trading Commission has signaled receptiveness to the crypto and blockchain sector after including several executives from the space as part of its new Technology Advisory Committee (TAC).

CFTC commissioner and TAC sponsor Christy Goldsmith Romero announced the updated membership via a public statement on March 13, with the inaugural meeting of the new committee set to take place on March 22.

The TAC itself was formed in 1999 and aims to assist the CFTC in “identifying and understanding the impacts and implications of technological innovation in financial services and markets.”

“The TAC may inform the Commission’s consideration of technology-related issues in support of its mission to ensure the integrity of derivatives and commodities markets and the achievement of other public interest objectives,” the announcement reads.

The TAC also has the potential to provide advice on tech investments that “could support the Commission in meeting its surveillance and enforcement responsibilities.”

Former White House official Carole House will serve as the chair of the committee, with Ari Redboard, the head of legal and government affairs at blockchain intelligence firm TRM Labs, serving as the vice chair.

Other crypto-related members include Ava Labs founder and CEO Emin Gün Sirer, Circle vice president of global policy Corey Then, FireBlocks co-founder and CEO Michael Shaulov, Inca Digital CEO Adam Zarazinski and blockchain auditor Trail of Bits co-founder Dan Guid.

Outside of crypto, executives from major companies such as IBM, Amazon, the CME Group and Cboe Global Markets have also been included in the TAC. There is also a strong showing of professors from university law schools such as Cornell and the University of Michigan.

As part of the announcement, Goldsmith Romero emphasized the importance of working with members from private tech and other organizations to regulate and protect the commodities/futures market:

“To protect our markets from increasingly-sophisticated cyber attacks, to ensure responsible development of digital assets in a way that protects customers, and to ensure that the implications of emerging technologies like artificial intelligence are well understood, the Commission requires advice from technology experts.”

“These experts can provide us foundational knowledge about the technology, as well as the complex and nuanced impacts and implications of technology on financial markets,” she added.

Related: Biden vows to hold accountable those responsible for SVB, Signature collapse

The collaborative approach from the CFTC appears to be in stark contrast to that of the other U.S. agencies, such as the Securities and Exchange Commission, which has reportedly acted frostily toward crypto firms behind closed doors.

Executives such as Coinbase CEO Brian Armstrong, Kraken co-founder Jesse Powell and Custodia Bank CEO Caitlin Long have all highlighted issues with trying to proactively work with the SEC and the government over the past couple of years.

Silvergate and SVB bite the dust: Law Decoded, March 6–13.

Elizabeth Warren and Sherrod Brown didn’t miss a chance to attack the crypto industry after bank failures.

Last week, another major quake shook crypto markets. Silvergate Bank — a crypto-fiat gateway network for financial institutions and a significant on-ramp for cryptocurrencies in the United States — shut down operations due to liquidity problems. 

A couple of days later, another ​​Federal Deposit Insurance Corporation-insured institution, Silicon Valley Bank (SVB), was shut down by California’s financial watchdog. The bank provided financial services to several crypto-focused venture firms, including Andreessen Horowitz and Sequoia Capital, with USD Coin (USDC) issuer Circle holding around 20% of its reserves with the bank. Following the news, USDC depegged and lost over 10% of its value in 24 hours.

Some lawmakers, well known for their hostility to crypto, quickly attacked the industry. Senator Elizabeth Warren called Silvergate’s failure “disappointing, but predictable,” calling for regulators to “step up against crypto risk.” Senator Sherrod Brown shared his concern that banks involved with crypto were putting the financial system at risk and reaffirmed his desire to “establish strong safeguards for our financial system from the risks of crypto.”

The most important commentary, however, came on Sunday when United States Treasury Secretary Janet Yellen revealed that authorities were not considering a major bailout of Silicon Valley Bank. According to Yellen, the Federal Deposit Insurance Corporation is considering “a wide range of available options,” including acquisitions from foreign banks.

Biden budget proposes 30% tax on crypto mining electricity usage

Crypto miners in the U.S. could be subject to a 30% tax on electricity costs under a budget proposal by U.S. President Joe Biden to “reduce mining activity.” According to a Department of the Treasury supplementary budget explainer paper, any firm using resources — whether owned or rented — would be subject to an excise tax equal to 30% of the electricity costs used in digital asset mining. It proposed the tax would be implemented after Dec. 31, phased in over three years at a rate of 10% a year, reaching the max 30% tax rate by the third year.

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​​Stablecoins and Ether are ‘going to be commodities,’ reaffirms CFTC chair

Stablecoins and Ether are commodities that should come under the purview of the United States Commodity Futures Trading Commission (CFTC), according to the commission’s chairman, Rostin Behnam.

In a recent hearing, senators questioned Behnam about the differing views held by the CFTC and the Securities and Exchange Commission (SEC) following the CFTC’s 2021 settlement with stablecoin issuer Tether. Behnam said, “It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity.” Behnam’s most recent comments oppose a view held by SEC chair Gary Gensler, who claimed that everything other than Bitcoin (BTC) is a security — a claim multiple crypto lawyers rebuffed.

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China announces plans for a new national financial regulator

The Chinese government reportedly has plans for a regulatory overhaul, including introducing a new national financial regulator. The reforms would mean that ​​its current banking and insurance watchdog — the China Banking and Insurance Regulatory Commission — will be abolished. The responsibilities of this commission will be moved to a brand new administration, as will particular functions of the central bank and securities regulator.

This announcement follows a call for reforms for party and state institutions in China from President Xi Jinping. These reforms will also include a bureau for sharing and developing data resources, which will partly replace the duties of the current Office of the Central Cyberspace Affairs Commission.

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​​Stablecoins and Ether are ‘going to be commodities,’ reaffirms CFTC chair

In the tug-of-war between the United States regulators over control of crypto assets, the Commodity Futures Trading Commission chair has tripled-down on his stance that Ether and stablecoins are commodities.

Stablecoins and Ether (ETH) are commodities that should come under the purview of the United States Commodity Futures Trading Commission, its chairman has again asserted at a recent Senate hearing.

At the March 8 Senate Agricultural hearing, CFTC chair Rostin Behnam was asked by Senator Kirsten Gillibrand about the differing views held by the regulator and the Securities and Exchange Commission following the CFTC’s 2021 settlement with stablecoin issuer Tether. Behnam replied:

“Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view.”

“It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity,” he added.

In the past, the CFTC has asserted that certain digital assets such as Ether, Bitcoin (BTC) and Tether (USDT) were commodities — such as in its lawsuit against FTX founder Sam Bankman-Fried in mid-December.

Asked what evidence the CFTC would put forward to win regulatory influence over Ether during the Senate hearing, Behnam said it “would not have allowed” Ether futures products to be listed on CFTC exchanges if it “did not feel strongly that it was a commodity asset,” adding:

“We have litigation risk, we have agency credibility risk if we do something like that without serious legal defenses to support our argument that [the] asset is a commodity.”

The comment has seemingly cemented Behnam’s sometimes wavering opinion on the classification of Ether. During an invite-only event at Princeton University in November last year he said Bitcoin was the only cryptocurrency that could be viewed as a commodity, leaving out Ether. Only a month before that, he suggested Ether could be viewed as a commodity too.

Related: CFTC continues to explore digital asset policy considerations in MRAC meeting

Behnam’s most recent comments oppose a view held by SEC chair, Gary Gensler, who claimed in a Feb. 23 New York Magazine interview that “everything other than Bitcoin” is a security, a claim that was rebuffed by multiple crypto lawyers.

The differing viewpoints of the market regulators could set the stage for a conflict as each vies for regulatory control of the crypto industry.

In mid-Febuary, the SEC flexed its authority against stablecoin issuer Paxos saying it may sue the firm for violating investor protection laws alleging its Binance USD (BUSD) stablecoin is an unregistered security.

Around the same time, the regulator similarly targeted Terraform Labs and called its algorithmic stablecoin TerraUSD Classic (USTC) a security, a move Delphi Labs general counsel, Gabriel Shapiro, said could be a “roadmap” for how the SEC could structure future suits against other stablecoin issuers.

The SEC’s crypto clampdowns have seen pushback from the industry. Circle founder and CEO Jeremy Allaire said he doesn’t believe “the SEC is the regulator for stablecoins,” saying they should be overseen by a banking regulator.

CFTC continues to explore digital asset policy considerations in MRAC meeting

Commissioner Kristin Johnson said in prepared remarks that the U.S. digital economy was “witnessing the deployment of Web 3.0”.

The United States Commodity Futures Trading Commission, or CFTC, was a part of discussions on a regulatory framework for digital assets as well as use cases for blockchain technology.

In a March 8 meeting of the CFTC’s Market Risk Advisory Committee, commissioners, regulators, and industry representatives were scheduled to discuss “critical policy considerations” as part of the commission’s efforts to develop a regulatory framework for digital assets. In addition, industry leaders including Uniswap Labs CEO Hayden Adams and Chainalysis’ global head of public policy Caroline Malcolm were part of a panel focused on use cases of DeFi, distributed ledgers, and blockchain.

“Consistent with the MRAC’s historic role in delivering first-of-its-kind or unprecedented reports and recommendations, we anticipate furthering the Commission’s focus on targeted recommendations to address climate-related risks in our markets and delivering recommendations for the regulation of digital asset markets,” said CFTC commissioner Kristin Johnson in prepared remarks.

Johnson added:

“Our economy is a digital economy. Global financial markets indisputably rely on the internet and the internet of things (IOT). We are now witnessing the deployment of Web 3.0.”

Along with the U.S. Securities and Exchange Commission, the CFTC has been behind some of the recent lawsuits against high-profile figures in the crypto space. The commission has charged former FTX executives Nishad Singh and Sam Bankman-Fried for allegations related to commodities fraud. Former Alameda Research CEO Caroline Ellison and former FTX chief technology officer Gary Wang face similar charges, but have consented to stays in the CFTC’s civil cases.

Related: CFTC head looks to new Congress for action on crypto regulation

Balancing the burden of digital asset regulation in the United States could be a point of contention among federal agencies and lawmakers in the current session of Congress. House Representative Tom Emmer introduced legislation aimed at limiting the Federal Reserve’s authority in issuing a central bank digital currency, while the SEC also has moved against Paxos over the Binance USD token.

Decentralized finance to be examined at inaugural CFTC tech advisory meeting

A panel at an upcoming advisory meeting for the financial regulator will “explore issues in decentralized finance.”

The United States commodities regulator is set to take a close look at the decentralized finance space at an upcoming meeting of its tech committee, where it has also invited crypto industry executives to present.

The Commodities Futures Trading Commission (CFTC) announced on March 1 that the agenda for the March 22 meeting of its Technology Advisory Committee will include a panel on “exploring issues in decentralized finance.”

Other panels will explore responsible Artificial Intelligence (AI) development and possible threats arising from AI along with cybersecurity threats to financial markets.

CFTC commissioner Christy Goldsmith Romero said in a statement the panel has an opportunity “to look past labels and examine the issues presented by DeFi thoughtfully and holistically,” adding:

“A discussion about DeFi, including cyber vulnerabilities, indicators of ‘decentralization,’ digital identity and unhosted wallets, will contribute to ongoing policy discussions in Washington, D.C. and beyond the beltway.”

The panel will include presentations that provide an overview of the DeFi ecosystem and will discuss decentralization issues, digital identity, noncustodial crypto wallets and exploits.

Executives from crypto companies including crypto custody platform Fireblocks, security company Trail Of Bits, venture capital firm Terranet Ventures and blockchain intelligence firms TRM Labs and Metrika are slated to present during the meeting.

The meeting agenda will also include a session that considers a subcommittee on crypto and blockchain technology in another move to help cement its bid to win regulatory jurisdiction over crypto.

The CFTC’s DeFi-related panels agenda for the meeting. Source: CFTC

Last month, the CFTC’s Global Markets Advisory Committee discussed digital asset markets at its inaugural meeting.

Related: Rep. Maxine Waters says all US regulators ‘better get together on crypto’

Commissioner Caroline Pham, who oversaw the Feb. 13 meeting, said that crypto markets are “truly borderless” and urged policymakers to “understand what is happening” so the policy approach by the U.S. “does not leave Americans behind and playing catch-up.”

The CFTC has been edging for regulatory control of the burgeoning crypto sector from the Securities and Exchange Commission, with CFTC commissioners urging Congress to give the regulator oversight overcrypto.

CFTC chairman Rostin Behnam has similarly attempted to justify why the regulator should have authority over the space, saying the commission was “well positioned” to address regulatory shortfalls.

SEC, CFTC press civil charges against former FTX exec Singh parallel to criminal case

Singh’s former colleagues Ellison and Wang consented to stays in their CFTC cases; Singh has agreed to submit a consent order proposal in the CFTC case.

Civil charges were announced against former FTX director of engineering Nishad Singh on Feb. 28, the same day he entered a guilty plea to three counts of criminal fraud in Manhattan district court. Both the United States Securities and Exchange Commission and the Commodity Futures Trading Commission are pressing charges against him.

Singh pleaded guilty in the U.S. District Court for the Southern District of New York to one count of wire fraud, one count of conspiracy to commit wire fraud on FTX customers, and one count of conspiracy to commit commodities fraud after reportedly reaching a deal with prosecutors.

The CFTC said it is charging Singh with fraud by misappropriation and with aiding and abetting fraud committed by Samuel Bankman-Fried, FTX and Alameda Research. The SEC’s complaint charges Singh with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. According to the SEC:

“Singh also knew or was reckless in not knowing that, more generally, Bankman-Fried often operated the companies [FTX and Alameda Research] without regard for responsible corporate controls and appropriate conduct.”

Singh did not contest the CFTC charges and has agreed to enter a proposed consent order, that agency reported. According to the SEC, Singh has consented to a bifurcated settlement, imposing a number of conditions on him, subject to court approval. “He will be permanently enjoined from violating the federal securities laws, the above-described conduct-based injunction, and an officer and director bar,” the SEC said.

Related: FTX seeks to claw back political donations by the end of February

The court will also decide on whether he is subject to “disgorgement of ill-gotten gains plus prejudgment interest and/or a civil penalty.”

Former FTX CEO Sam Bankman-Fried, former Alameda Research CEO Caroline Ellison and former FTX chief technology officer Gary Wang have also been charged by the SEC and CFTC. Ellison and Wang settled their cases with the SEC but consented to stays in the CFTC cases. The SEC’s and CFTC’s cases against Bankman-Fried were stayed until the conclusion of his criminal trial.

Binance readies checkbook for potential fines from US regulators: Report

The world’s largest crypto exchange wants to resolve outstanding investigations with U.S. regulators.

The world’s largest digital asset exchange, Binance, is preparing to face fines and penalties in order to settle outstanding regulatory and law-enforcement investigations in the United States.

According to a Feb. 15 WSJ report that cited the firm’s chief strategy officer, Patrick Hillmann, Binance has been working with regulators to remedy past compliance issues.

Hillmann stated that Binance is “working with regulators to figure out what are the remediations we have to go through now to make amends for that.”

He added that the outcome of ongoing investigations will likely be fines but could be more, stating “that is for regulators to decide.”

Binance has been subject to several investigations in the U.S. including one which began in 2018 by the Department of Justice over potential violations of anti-money-laundering laws.

In March 2021, the Commodity Futures Trading Commission also probed whether the company offered crypto derivatives to U.S. customers without registering with the agency.

The Securities and Exchange Commission also launched a probe into Binance’s U.S. division last February, regarding trading firms connected to CEO Changpeng Zhao.

Hillmann added that Binance was “highly confident and feeling really good about where those discussions are going,” but couldn’t put a figure on the size of the fines or a timescale for resolution with U.S. regulators.

He said the lack of clarity for crypto in America made it a “very confusing time for us.”

The SEC has recently ramped up what industry observers call a “war on crypto” — which appears to target certain staking services and stablecoins which it has deemed as falling under securities laws.

Referring to the recent enforcement activity, the Binance executive said it “would have a really deep and long-lasting chilling effect in the United States.”

Related: Bad day for Binance with SEC investigation and Reuters exposé

Earlier this week, New York regulators cracked down on Paxos, preventing it from issuing more of the Binance-branded stablecoin BUSD.

Last week, U.S. crypto exchange Kraken was hit with a $30 million fine and ordered to halt its staking services following SEC enforcement action.

Patrick Hillmann concluded that resolving issues with U.S. regulators would be good for the firm and its future.

“It will be a good moment for our company because it allows us to put it behind us.”

Binance declined to offer any additional comments on the matter.