Global Courant 2023-04-25 18:52:11
A Commodity Futures Trading Commission official said Tuesday she hopes to find a “path forward” in the regulator’s legal battle with crypto exchange Binance, noting that no decision has yet been made on whether or not to settle the case or bring it to court.
Kristin N. Johnson, commissioner at the CFTC, said the regulator has been in talks with Binance to address concerns about the company’s conduct.
The CFTC sued Binance, its CEO Changpeng Zhao and its former chief compliance officer last month alleging that the platform solicited users in the US through its platform and allowed them to trade derivatives despite not being authorized to do so.
Binance said it would stop operating in the US in 2019.
“I want to be very careful not to prejudge what will actually happen in the process. And I want to say that in the context of any process, we are usually always willing to have conversations and usually even before the process begins,” Johnson said in an interview with CNBC’s Arjun Kharpal Tuesday.
“We are in constant dialogue with the company to describe what we believe is potentially problematic behavior and to give them a chance to explain that behavior and help us find a way forward.”
“At this point, we can conclude that there is no direct way forward,” she added. “That doesn’t mean there couldn’t be and hopefully there will be one.”
Her comments mark a rare statement about the Binance lawsuit to the media since the CFTC first announced it was suing the company on March 27.
Binance was not immediately available when CNBC reached out. In a blog post after filing the complaint, Zhao disagreed with the CFTC’s findings, saying the exchange was “committed to transparency and cooperation with regulators and law enforcement” in the US and globally.
The Binance group, unlike its US subsidiary Binance.US, is not regulated in the US. The company has often faced criticism for operating without approval in several jurisdictions, including the UK, Italy and Singapore.
Crypto companies have recently faced tighter scrutiny in the US in the wake of crypto exchange FTX’s $32 billion blowout and a slew of other industry meltdowns and a plunge in prices that have seen hefty losses for investors. caused.
On Monday, Coin base filed a lawsuit against the U.S. Securities and Exchange Commission, fulfilling a vow made last week by CEO Brian Armstrong to take the regulator to court. Coinbase suggested that the regulator should be forced to clarify whether it would allow the crypto industry to be regulated under existing securities laws.
Johnson said she hopes Congress will soon step in to introduce crypto-specific regulations.
The crypto industry is still largely unregulated, but calls to be brought inside the regulatory fold have grown following recent outbursts in the space, such as the implosion of crypto exchange FTX and stablecoin firm Terra.
“I really think we have to be very careful to have dynamic regulation that not only responds to the asset classes we see in the market today, but gives us the flexibility and ability to respond as entrepreneurs and innovators, programmers and developers software protocols continue to release more and more interesting asset classes and products and financial markets,” she said.
“Under the immediately existing laws, there is a provision to understand how securities laws apply to all digital assets that qualify as securities. And the same in the context of commodities,” Johnson said.
“But,” she added, “it’s imperative that Congress step forward and make it clear what their preference is in terms of how to handle the spot market oversight. defining piece is very critical. And I think it’s helpful to us if Congress helps us and gives us that guidance.”
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