WASHINGTON — Binance Holdings Ltd’s compliance with US regulations was criticized by the head of Commodity Futures Trading Commission, following a lawsuit by the derivatives regulator against the cryptocurrency exchange and its CEO for numerous alleged violations.

“These are not unsophisticated individuals,” CFTC Chairman Rostin Behnam said Thursday at an event hosted by Princeton University.

“They are starting large companies and offering futures contracts and derivatives to US customers.” 

Behnam emphasized that Ether, the second-largest cryptocurrency, and stablecoins are regarded as commodities. While US regulators commonly recognize Bitcoin, the most prominent token, as a commodity, there is still uncertainty regarding which other virtual coins should be deemed securities under American law and comply with the SEC’s stringent investor-protection regulations.

The SEC has taken various measures against significant crypto companies, such as a $30 million settlement with the Kraken exchange over its staking program. Staking is a crypto feature that enables users to earn returns by allowing their tokens to be used in facilitating transactions on a blockchain.

SEC Chair Gary Gensler has stated that the case should serve as a warning to the industry, and he has also noted that several digital assets are comparable to unregistered securities.