Binance, the world’s largest centralized exchange for digital assets, saw a massive outflow of $850 million just hours before the Commodity Futures Trading Commission (CFTC) issued an indictment against the exchange.
According to Thanefield Capital’s data research, there were large stablecoin withdrawals across centralized exchanges, totaling almost $1.5 billion in just 12 hours prior to the CFTC indictment. The withdrawals from Binance align with rumors that something significant was happening, as evidenced by the massive movement of stablecoins out of exchanges.
Binance Indicted for Financial Wrongdoing
The CFTC has filed a lawsuit against Binance for breaking numerous US financial laws, including rules intended to prevent money laundering. The regulator accused the top exchange of manipulating markets, lacking compliance efforts, and not cooperating with investigative subpoenas. It also accused it of obscuring the location of its executive offices.
Binance has rejected many of the allegations and defended its practices. The exchange claims it has made “significant investments” to ensure that US users are not active on the platform.
Also, the company has blocked users identified as American citizens or residents or those who have a US mobile number. It also stated that it intends to continue to collaborate with regulators in the US and around the world to develop a transparent, thoughtful regulatory regime.
Binance CEO Targeted in Lawsuit
Binance CEO Changpeng Zhao has been named as a defendant and has been repeatedly singled out throughout the complaint. The CFTC stated that it had been able to gather evidence by collecting Signal text chains and group chats from “Zhao’s telephone,” which has raised questions about how this was possible. According to the CFTC, Zhao has communicated over Signal with numerous Binance officers, employees, and agents for varying purposes and they are investigating those communications.
The commodities regulator has accused Binance employees of knowing that the platform had facilitated “potentially illegal activities.” The regulator alleges that Binance officers, employees, and agents have acknowledged that the Binance platform has facilitated such activities internally.