Reported by Mengqi Sun

The suit by U.S. regulators against Binance Holdings Ltd. focuses in large part on the work of the cryptocurrency exchange’s former chief compliance officer, alleging he willfully aided and abetted the firm in evading U.S. laws. 

Samuel Lim, Binance’s compliance chief between 2018 and 2022, faces civil charges of undermining Binance’s compliance program and conducting activities to evade rules designed to prevent illicit financial activity, the Commodity Futures Trading Commission said Monday.

The CFTC, the derivatives market regulator, alleged that Mr. Lim and other officers promoted the use of creative means to help the exchange’s customers circumvent Binance’s compliance controls. He allegedly implemented a corporate policy that advised Binance’s U.S. customers to use virtual private networks, or VPNs, to avoid Binance’s internet protocol address-based controls or to create new offshore shell companies to avoid the exchange’s anti-money-laundering controls, according to a complaint filed by the CFTC Monday in Chicago federal court. 

The complaint also details Binance’s internal conversations and business strategies in which, for instance, the exchange allegedly favored customers “closely associated with illicit activity” opening new accounts and continuing to trade on the platform, rather than removing customers that presented regulatory risk.

The charges against Mr. Lim represent CFTC’s increasing scrutiny in regulating the crypto industry, particularly in holding company executives accountable, according to Rory Doyle, financial crime policy manager at regulatory technology provider Fenergo.

Read full report: https://www.wsj.com/articles/cftc-charges-against-binance-highlight-role-of-former-compliance-chief-dd1cdee2