The crypto world is in turmoil again. The US financial derivatives regulator, the CFTC, on Monday took legal action against the world's largest cryptocurrency exchange, Binance and its boss Changpeng Zhao, accused of deliberately circumventing US regulations.

This is a new episode in the offensive launched by regulators, the CFTC and the market watchdog mainly (SEC), against the practices of players in the cryptocurrency community. They are seeking to compensate for the lack of legislation to regulate this industry, even if several texts are being discussed in Congress. Their offensive accelerated after the bankruptcy in November of FTX, the world's second largest platform.

In the document filed in a federal court in Illinois (north), the CFTC demands in particular that Binance be banned from registering and selling certain financial products in the United States.

"CZ" counterattacks

Binance and its boss "CZ" described the legal action as "unexpected" and "regrettable", saying they have been collaborating with the CFTC for "more than two years", according to a reaction sent to AFP. "We plan to continue working with U.S. regulators and regulators around the world," the group said.

At the end of 2022, Changpeng Zhao rose to the forefront of the cryptocurrency scene during the sinking of one of its rivals, the FTX exchange platform. As the horizon darkened for FTX, CZ had stated on Twitter a proposed takeover, before canceling the transaction. "I tried, but... " he tweeted before adding an emoji of a crying face to tears.

Since then, CZ has called his former rival, former FTX boss Sam Bankman-Fried, a "psychopath", who is now facing US justice for bank fraud, money laundering and ten other charges. Binance is not without controversy.

No global headquarters

Several Reuters investigations revealed at the end of 2022 that the platform had served as a vector for money laundering or the transit of funds belonging to nationals of countries hit by US sanctions.

While Binance has firmly denied most of these accusations, it has acknowledged having had "interactions" with users of Iranian cryptocurrency exchanges, without specifying the number of accounts or the sums involved.

Binance was also the victim of a hack in October, the scale of which was estimated at around $100 million. In addition, the fact that the company does not have a global headquarters, despite open offices in Paris, Abu Dhabi, Dubai and Bahrain, already questioned several regulators. As early as 2021, the United Kingdom authorities considered that the group's activities could not be properly supervised and posed a risk to consumers.

Born in China, the 45-year-old executive emigrated with his family to Toronto in the late 1980s and became a Canadian citizen. In several interviews, he cultivates his image as a "self-made man" and insists on his humble beginnings, claiming to have been a cook at McDonald's and a gas station attendant.

Poker

After studying computer science in Montreal, CZ worked in Tokyo and New York before moving back to China for a time. He claims to have first heard about cryptocurrencies in Shanghai around a poker table in 2013. Four years later, he launched Binance, an exchange platform that would be a lightning success.

With more than 120 million customers, the group is now by far the largest player in the sector in terms of trade volume. CZ's fortune is estimated at $ 10.5 billion by Forbes magazine, making him the 167th richest person on the planet. However, it has melted in a year and a half with the collapse of the cryptocurrency market.

CZ cultivates a casual style and sports in most of his interventions a black polo shirt with the logo of Binance, which he also had tattooed on his right arm. The leader speaks extensively on Twitter, sharing with his 8.3 million followers his perspectives on cryptocurrencies, news of his company, but also humorous publications.

A mode of communication reminiscent of that of Elon Musk, the owner of the social network with the blue bird. Binance has also paid half a billion dollars to help the bubbling entrepreneur buy the platform.

Asked by AFP last summer about the comparison with the boss of Tesla and SpaceX, whom he has never met in person, CZ played the card of humility. "Elon is a much stronger entrepreneur," the Binance boss said. "I'm a more normal guy."

  • Economy
  • Cryptocurrency
  • Sam Bankman-Fried