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In what is fast becoming a troubling attempt by the regulators in the US to ringfence the entire crypto sector, Binance and its CEO, Changpeng Zhao (CZ), just became the latest entries in the “shitlist” rostrum of the CFTC, with additional action from the SEC remaining a distinct possibility.
CFTC V Binancehttps://t.co/0tIVypBwoG
— db (@tier10k) March 27, 2023
To wit, the Commodity Futures Trading Commission (CFTC) in the US has sued Binance and Changpeng Zhao in a Chicago federal court for failing to prevent US citizens from trading crypto derivatives. Bear in mind that all entities that provide such services to Americans are mandated by law to be registered with the CFTC. Binance was apparently not properly registered with the regulator and so could not provide such a service to US citizens. The indictment also levels charges of wilful evasion of federal law and operating an illegal digital asset derivatives exchange.
— JC Oviedo (@JCOviedo6) March 27, 2023
As per Binance's revenue report for September 2020, the crypto exchange had 2.51 million customers in the US, with an additional 0.31 million reported in the "UNKNWN" or unknown location category.
JUST IN: 🇺🇸 CFTC lawsuit alleges 300 #Binance accounts associated with its CEO were exempt from the company's "insider trading" policy. pic.twitter.com/Z7DPHHS5fH
— Watcher.Guru (@WatcherGuru) March 27, 2023
Additionally, 300 accounts associated with Changpeng Zhao were exempt from Binance's insider trading policy, as per today's indictment.
Hamas Transactions pic.twitter.com/iDevUrfMK4
— JC Oviedo (@JCOviedo6) March 27, 2023
The authorities are also investigating transactions that are suspected to have been carried out by the terror group Hamas.
A single trader in the US, from Chicago, is 12% of the volume on Binance.
ONE TRADER.
Remember kids, when I tell you that fewer than twenty people control the entire crypto market, we're not bullshitting you. pic.twitter.com/eCD4axjdC7
— Bitfinex'ed 🔥🐧 Κασσάνδρα 🏺 (@Bitfinexed) March 27, 2023
Apparently, a single trading firm from Chicago is responsible for a whopping 12 percent of the volume on Binance.
Of course, today’s development might just be the start of a long-haul battle between Binance and US regulators. The IRS has been examining the crypto exchange’s compliance with anti-money laundering rules. Additionally, the SEC is currently examining whether Binance violated securities law by offering “unregistered securities.”
As stated earlier, the authorities in the US have adopted regulation by regulation by enforcement as an effective method of deterring the advancement of the crypto sector in the US in the aftermath of FTX’s spectacular collapse. A few weeks back, the SEC shuttered Kraken exchange’s crypto staking program for violating securities law. The SEC has also gone after the Binance USD (BUSD), a stablecoin that is issued by Paxos under a license arrangement with Binance.
More recently, the SEC unveiled charges related to fraud and the selling of unregistered securities against TRON founder Justin Sun. The regulator alleged that Sun manipulated trading activity in two tokens to give a false appearance of active trading. Moreover, the charges related to violation of securities law have also been leveled against Genesis, Gemini, and Do Kwon’s Terraform Labs.
In its indictment against Binance, the CFTC stated that digital assets including Bitcoin, Ethereum, and Litecoin are commodities, again showing the difference of the US SEC’s view that only Bitcoin is not a security. However, Coinbase CIO pointed out that a security can… pic.twitter.com/b1cz4p5Yri
— Wu Blockchain (@WuBlockchain) March 27, 2023
Interestingly, SEC’s Chair, Gary Gensler, is on record for saying that everything other than Bitcoin was a security. This means that the vast majority of the crypto sector is in the SEC’s crosshairs at the moment.
Toward the end of last week, the SEC issued a Wells Notice to Coinbase. Bear in mind that the notice is meant to inform the recipient that an enforcement action is imminent.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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