Bitcoin and Ether Are Commodities, Says CFTC in Binance Lawsuit

Crypto exchange Binance and its CEO have been sued by the CFTC.

The regulatory agency filed the lawsuit Monday in federal court in Chicago. The CFTC alleges that the executive and his company broke trading and derivatives laws.

Binance CEO Changpeng Zhao and Samuel Lim, the exchange’s former chief compliance officer, are named in the complaint.

According to the complaint, “Binance, under Zhao’s direction and control and with Lim’s willful and substantial assistance, has solicited and accepted orders, accepted property to margin, and operated a facility for the trading of futures, options, swaps, and leveraged retail commodity transactions involving digital assets that are commodities including bitcoin (BTC), ether (ETH), and litecoin (LTC) for persons in the United States.”

A Binance spokesperson did not immediately return a request for comment.

The exchange has previously been investigated by the US Justice Department to discover whether Binance violated the Bank Secrecy Act, Reuters reported last year. A spokesperson said at the time the company “[works] with agencies regularly to address any outstanding questions,” but did not comment on whether it was being investigated for violating act.

The reported action is the latest in a string of measures taken by US regulators against large crypto players in recent weeks. 

The SEC served Coinbase with a Wells notice last week for alleged securities violations. The company’s CEO, Brian Armstrong, said the next day Coinbase would be happy to take the commission to court if necessary to defend itself and other industry firms.  

Zhao reacted to the news on Twitter with the number “4”, which he has previously indicated means that he considers the news to be either fake, or “FUD” — fear, uncertainty, and doubt.

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