After encountering the siege of five major U.S
After encountering the siege of five major U.S. government departments and being sued, what U.S. regulations did the world's largest cryptocurrency exchange, Coin Security, violate?
On Monday, March 27th, Eastern Time, the US Commodity Futures Trading Commission (CFTC) announced a lawsuit against Coin An CEO Zhao Changpeng, accusing Coin An of "making every effort" to conduct business with US clients in violation of US regulations.
In the indictment, CFTC listed a series of crimes suspected by Coin Security, such as not registering with regulatory authorities, guiding customers to use VPN to conceal their true location, and blurring the headquarters and branch operating locations. These crimes can be traced back to the period when irregular application led to the brutal growth of cryptocurrencies.
As a response to Monday's actions,A spokesperson for Coin An called the CFTC lawsuit "unexpected and disappointing"The exchange has made significant progress in strengthening compliance, has been cooperating with regulatory agencies, and will continue to cooperate with authorities in the United States and other places.
Zhao Changpeng stated in another blog post that CFTC's complaint "seems to contain incomplete statements of facts,We do not agree with the characterization of many of the issues accused in the complaint Zhao Changpeng has repeatedly declared to the outside world that Coin An has always been steadfast in following the path of standardization.
CFTC: Coin Security does its best to avoid complying with US regulations
The following are the nine most shocking accusations made by CFTC against Coin An:
1) Wherever Zhao Changpeng goes, Coin An will go
The lawsuit claims that Coin An intentionally ambiguous about the location of its headquarters, and Zhao Changpeng often says that wherever he is present, it is the headquarters of Coin An Company.
2) No matter what you do, don't let anyone know that you are American
CFTC said that Yuan'an suggested that its high-value American customers use virtual private network (VPN) to log in their accounts to cover their real location. Coin Security usually does not require these clients to provide any identification documents required by US law.
3) Completely disregarding US law
The lawsuit claims that although the largest customer base of Coin Security is in the United States, it has never registered with US regulatory agencies and completely disregards US law.
4) Implying that customers are evading regulation
According to the litigation documents, if Coin An is investigated by law enforcement agencies and if a customer's account is frozen or unfrozen, Coin An will issue a warning to VIP customers. Coin An will also require the account advisor to immediately contact the client. But if the account is unfrozen, Coin Security requires the consultant to "not directly tell the user to run the account, only tell them that the account has been unfrozen and investigated by XXX. If the user is a large trader or a smart trader, he/she can understand its purpose".
5) Insider trading
Regulatory authorities have stated that Coin An quietly operates approximately 300 of its own accounts on its own exchange, which may affect cryptocurrency prices without customers' knowledge. In addition, traders such as MeritPeak and SigmaChain can be exempt from the constraints of Coin Security's anti fraud and insider trading policies.
6) Behind the burning after reading
The lawsuit claims that Coin Security executives often use social apps such as Telegram and Signal that burn after reading to communicate internally and with customers.
7) The Maze of Ownership
The CFTC alleges that the use of a "maze" of ownership structure by Coin An intentionally obscures the location of each entity's operations, making the exercise of jurisdiction by regulatory agencies challenging.
8) Everything comes from the upper class
Regulatory authorities have stated that although Zhao Changpeng operates a business worth billions of dollars, he personally makes decisions on even trivial matters. For example, in the month when Coin An achieved $700 million in revenue, Zhao Changpeng personally approved a $60 office furniture expense.
9) There are whales hidden in the room
Regulatory authorities have found that a Chicago based company controls about 12% of the trading volume of Coin An, and Zhao Changpeng urges them to use non US IP addresses to conduct business on the exchange.
The biggest goal of US regulatory agencies
In last year's coin circle war, Zhao Changpeng defeated the "coin circle Musk" SBF in one fell swoop, and the influence of Coin An reached a new level, equivalent to controlling this $1.1 trillion industry. But this also means that if there is an accident with Coin An, the consequences may be more serious than FTX.
After the CFTC filed a lawsuit, the overall decline of cryptocurrencies accelerated, with Bitcoin plummeting more than 4% at one point. Cryptocurrency related stocks plummeted during the session, while Coinbase fell nearly 11% during the session.
actually,Coin security is the biggest target of all crackdowns by US regulatory agencies.
According to CoinGecko, a crypto data company, the BNB token is currently the fourth largest token in the world, with a total value of approximately $62 billion.
According to Kaiko, a crypto data company, Coinon has accounted for about 70% of all trading volume in the spot market so far this month, while CoinbaseGlobal only accounts for 6%.
A report by CoinGecko shows that in the perpetual futures of coin circle derivative financial instruments, CoinAn controlled 62% of global trading volume in 2022, setting a historic record. In contrast, Kaiko data shows that in the past year, Coin An's share in spot trading in the United States has been relatively small, close to 7%.
The current round of crackdown by US regulatory agencies has also affected others, including Coinbase Global, the founder of TRON, Sun Yuchen, and cryptocurrency tycoon DoKwon.
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