News of the Cyber World

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Crypto Platform Binance Sued by CFTC Over ‘Secret Plot’ to Evade US Laws

The Commodity Futures Trading Commission (CFTC) is suing crypto platform Binance and several top executives, alleging that they offered unregistered crypto futures and other derivatives for trading in the United States in violation of U.S. laws and devised a “secret plot” to help customers evade restrictions.

Binance stands accused of running a cryptocurrency derivatives-trading operation in the United States without properly registering it, in violation of CFTC regulations and the Commodity Exchange Act, according to the complaint (pdf) filed on March 27 in the U.S. District Court for the Northern District of Illinois.

Changpeng Zhao, co-founder and CEO of Binance, and Samuel Lim, the company’s former chief compliance officer, are also named in the lawsuit. It accuses them of falsely claiming to be restricting Americans from using the platform while in reality they were using a “calculated, phased approach” to increase Binance’s presence in the United States.

“On the surface, we cannot be seen to have U.S. users, but in reality we should get them through other creative means,” Lim allegedly said in a chat with a Binance employee, according to the complaint.

The CFTC said in a statement that Zhao, who was allegedly responsible for all major strategic decisions at the crypto platform, devised a “secret plot to instruct U.S.-based VIP customers to evade Binance’s compliance controls” and instructed Binance staff to communicate about compliance evasion in a way that “facilitated the automatic destruction of evidence.”
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Zhao took to Twitter after the lawsuit was announced and posted the number “4,” which, according to a previous message of his, refers to “ignore FUD, fake news, attacks, etc.” FUD stands for fear, uncertainty, and doubt.

The CFTC is also accusing the platform of establishing a complex network of companies meant to hide the true scope and nature of its operations.

“Binance’s reliance on a maze of corporate entities to operate the Binance platform is deliberate; it is designed to obscure the ownership, control, and location of the Binance platform,” the complaint reads.

The lawsuit accuses the defendants of intentional violations of U.S. law, including helping customers dodge compliance controls in a bid to maximize corporate profits.

Biden Administration Hit With Class-Action Lawsuit
Over Pressuring Big Tech to Censor Users

President Joe Biden’s administration has been hit with a class-action lawsuit over how the president and other top officials pressured Big Tech to censor users.

Lawyer Robert F. Kennedy Jr., his group Children’s Health Defense, and Louisiana resident Connie Sampognaro brought the suit in U.S. court in Louisiana against Biden and top officials like Surgeon General Vivek Murthy, Homeland Security Secretary Alejandro Mayorkas, and White House assistant Rob Flaherty.

The pressure the officials and their agencies brought to bear against Twitter and other Big Tech companies to crack down on alleged mis- and disinformation, including targeting Kennedy personally, violates the U.S. Constitution’s First Amendment, according to the new suit.

“It is well established that the government violates the Constitution if it uses coercive threats to induce private parties to censor protected speech or if it engages in collusive joint action with private parties to violate the First Amendment,” the suit states.

The legal action rests in part on evidence that has been uncovered by litigation in the same court brought by the attorneys general of Louisiana and Missouri.

That lawsuit has produced documents from the government and Big Tech companies showing repeated efforts by U.S. officials to get the companies to take action against users.

The efforts paid off, with companies regularly telling officials they were working on restricting information. That included any content that purportedly discouraged vaccines even when the content was true, one Facebook employee told the White House. In some cases, though, the government itself provided misinformation that was cited to take action against users, the documents show.

Musk announces Twitter verified perks to fend off AI tech, bots

Twitter CEO Elon Musk continued to promote the value of being a Twitter Blue subscriber on Monday, suggesting new features will help fend off artificial intelligence bots aiming to take over the platform.

Musk, who purchased Twitter in October for $44 billion announced early on that to have a blue check mark next to one’s username, they would have to subscribe to Twitter Blue.

Twitter Verified said last Thursday that the platform would begin winding down the legacy verified program and start removing legacy verified check marks beginning on April 1.

Only those who subscribe to Twitter Blue will get a check mark, but Musk also pointed to some other perks for signing up.

"Starting on April 15, only verified accounts will be eligible to be in For You recommendations," he tweeted. "[This] is the only realistic way to address advanced AI bot swarms taking over. It is otherwise a hopeless losing battle. Voting in polls will require verification for same reason."

Twitter user @Videotech_ responded to Musk’s tweet, saying he cannot get behind the decision.

"You need to invest money into talent and AI tech to detect bots on the platform," @Videotech_ said. "This isn’t the way to go. It could tarnish the platform."

"My prediction is that this will be the only platform you can trust," Musk replied.

The billionaire helped found OpenAI in 2015, which is the AI research and deployment company behind ChatGPT.

Just last week, Musk tweeted a meme of Elmo from "Sesame Street" with a shocked look on the puppet’s face.

"Me realizing AI, the most powerful tool that mankind has ever created, is now in the hands of a ruthless corporate monopoly," Musk said. "I’m sure it will be fine."