Is Binance the next TikTok?

Adam Cochran, partner at Cinneamhain Ventures

Moni, Odaily

It's right there. TikTok  Chief executive Officer Zhou Shouzi ended his "soul grilling" on Capitol Hill. On the evening of March 27, Bloomberg reported that the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit in federal court in Chicago against cryptocurrency trading platform Binance, its CEO, CZ, and its first chief operating officer, Samuel Lim.

Cinneamhain Ventures  Partner   Adam Cochran  In a social media campaign against the Commodity Futures Trading Commission. 74  Page of the indictment has been analyzed and compiled by the Odaily Planet as follows:

1. The U.S. Commodity Futures Trading Commission is trying to deal a "death blow" to Binance, possibly toppling the empire. First, and most critically, the CFTC argues that Binance has taken a planned, phased approach to increasing its presence in the United States since its launch in 2017, despite its stated intention to "block" or "restrict" access to its platform for customers based in the United States. Initially, Binance is strategically slightly targeting retail customers in the United States. Later, Binance increasingly relied on U.S. personnel and suppliers, actively cultivating lucrative, commercially important "VIP" customers, including U.S. -based institutional clients.

2  , CFTC  It points out that Binance cultivates a US customer base because it is profitable for them to do so, and that internal reports reveal that revenue from its products comes from "known" US customers.

3. Binance, CZ and Samuel Lim are listed in seven CEA/CFC/USC violations. The CFTC also implies that all Binance entities are under the control of "CZ". In particular, Merit Peak and BAM (Binance.us), the U.S. exchanges that specialize in Binance.

4  , CFTC  I even got a book on these issues. CZ  Chat logs and other files.

5. The CFTC also went after Binance's alleged manipulation and self-dealing, alleging that more than 300 "internal accounts" owned by CZ, Merit Peak and Sigma were used for proprietary trading, and that Binance did not take reasonable anti-fraud or anti-manipulation measures.

6. The CFTC is also specifically associated with Trust-Wallet, Binance Labs (due to its presence in the US), and a number of Binance employees with operations in the US, including the volunteer "Binance Angels", as the basis for the US filing.

7  , CFTC  It is believed that Binance and its affiliated entities will appoint the ultimate beneficiary (UBO) and in this way transfer control directly back to Binance. CZ.

8  , CFTC  Said it had obtained numerous chats and documents from insiders, indicating that CZ  Know about US clients and take steps to hide them in internal documents.

9. The CFTC will seek to prohibit Binance, CZ and Lim and all their related affiliates from carrying out activities:

- Engage in any of the conduct described in this case

- Transactions from registered entities

-Hold an interest in any commodity

- Direct any digital asset transactions

- Accept any funds from anyone for the purpose of buying or selling digital assets

- in   CFTC  Registration or exemption

- Serve as a head, officer or employee of a registered entity

And ask for binance

- Surrender (to be repaid in the form of fines) trading profits, income, salaries, commissions, loans or fees received from the U.S.

- Make all customers affected by these violations

-Pay the civil penalty assessed by the court

- Trial by jury on this matter

10  This means:

-Binance US  Will take a huge hit

- Market makers who are the ultimate beneficiaries in the US market will leave Binance

- Binance international payment tracks in the US or partner countries will be "dead forever"

- Technically, the CFTC might consider Binance international  It is illegal to provide any trading services outside the United States

-CZ, Lim  And Binance employees will not be able to work in regulated businesses

- Any U.S. -affiliated bank that deals in U.S. dollars will not provide funding services for Binance

-Binance Labs  Will be liquidated

- Binance could be liable for billions of dollars in fines

- Binance Team will never legally hold US goods or access US securities

11  , if   CZ, Lim  Binance failed to engage with the US courts and to defend itself at trial. CFTC  Will probably win outright and add some criminal contempt/obstruction charges, which will spread the problem to other countries. If CZ, Lim  Binance and China would have to disclose all data to U.S. regulators during the trial, which could lead to more problems.

12  For Binance, a relatively safe solution may be to   CFTC  Pay billions of dollars in fines, which could cost. CZ  And others have pleaded not guilty.

13  Unlike the Securities and Exchange Commission, the Commodity Futures Trading Commission generally doesn't focus on small cases, but when a lawsuit is filed, the outcome can be fatal.

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