Lack of Anti-fraud Controls for House Accounts
The lawsuit claims Binance failed to subject the 300 house accounts to "anti-fraud or anti-manipulation surveillance or controls." Additionally, it highlights that these accounts were exempt from newly implemented insider trading policies.
Details of the Binance Lawsuit
Court documents reveal that the US CFTC is accusing Binance of trading with 300 house accounts, which are directly and indirectly associated with CEO Changpeng Zhao. The lawsuit was filed in a Chicago Federal Court. The CFTC stated in the documents, "During the relevant period, Binance has traded on its platform through approximately 300 'house accounts' that are all directly or indirectly owned by Zhao."
Binance's U.S. Operations Under Scrutiny
The lawsuit also criticizes Binance's operations in the United States, claiming that the exchange "purposefully obscures the identities and location of the entities operating the trading platform." Furthermore, it accuses Binance's senior management of failing to supervise the company's activities properly and actively facilitating violations of U.S. law.