Binance, the world’s largest crypto exchange, has been accused of telling customers and employees to circumvent compliance controls in order to "maximise corporate profits".

The lawsuit filed by the Commodity Futures Trading Commission (CFTC) claims that since 2019 the firm has not required its customers to provide any identity-verifying information before trading on the platform.

Under US law designed to protect against terrorist financing and money laundering, it is illegal for exchanges or "futures commission merchants" to operate without such information, said the the US watchdog for the derivatives market.

The regulator is also charging Binance founder Changpeng Zhao and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations. Alongside Zhao, the firm's former chief compliance officer Samuel Lim will be charged for aiding and abetting Binance's violations.

As well as being being accused by the regulator of promoting the use of "creative means" to help customers circumvent compliance controls, Lim is being charged for rolling out corporate policy that told customers to access the trading facility through a virtual private network to avoid Binance’s IP address-based controls. In some circumstances, the regulator alleges the ex-COO told them to create “new” accounts through off-shore shell companies to evade Binance’s Know Your Customer (KYC)-based controls.

“For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance,” said CFTC chairman Rostin Behnam. “This should be a warning to anyone in the digital asset world that the CFTC will not tolerate wilful avoidance of US law.”

Founder Changpeng Zhao described the civil complaint as “unexpected and disappointing” given the company had been “working cooperatively” with the regulator for more than two years.

“Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterisation of many of the issues alleged in the complaint,” he wrote in a blog post.

Zhao said that Binance.com does not trade for profit or "manipulate" the market under any circumstances, describing the platform as the first global, non-US exchange to implement a mandatory KYC programme.

Binance recently announced it would put a stop to sterling deposits and withdrawals. The news came a month after the company put a similar halt to dollar transfers.

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