A lawsuit against Binance in the US signals the end of crypto’s Wild West days

The world’s largest cryptocurrency exchange, Binance, has been hit with a lawsuit by US regulator the Commodity Futures Trading Commission. This is not the first time a cryptocurrency exchange has been charged by a regulator. But this particular case involves a regulator that does not directly oversee cryptocurrencies. This indicates how regulators – particularly those in the US – hope to clamp down on the cryptocurrency industry.

The Commodity Futures Trading Commission’s lawsuit alleges that Binance violated US derivatives laws by offering its derivative trading services to US customers without registering with the right market regulators. It said Binance has prioritised commercial success over regulatory compliance.

The regulatory body has also levied charges against Binance’s founder and Chief Executive Officer, Changpeng Zhao and former Chief Compliance Officer Samuel Lim. They are charged with taking steps to violate US laws, including directing US-based “VIP customers” to open Binance accounts under the name of shell companies. The regulator has pointed to chat messages as evidence of Changpeng Zhao and Sim’s knowledge of various criminal groups using the exchange.

People visit Binance nearly 15 million times a week to trade on the over 300 cryptocurrencies it offers in more than 1,600 different markets. Changpeng Zhao is an outspoken advocate for cryptocurrencies and regularly tweets about the industry and his...

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