On March 28, Binance CEO Changpeng Zhao, also known as CZ, shared his first official response to the Commodities Futures and Trading Commission (CFTC) lawsuit in a blog post. The CEO rejected the allegations made in the complaint, arguing that Binance does not trade for profit or manipulate the market under any circumstances.
The CFTC filed a lawsuit against Binance on March 24, alleging that the cryptocurrency exchange was illegally operating in the United States and engaging in futures trading without registering with the regulatory body. The lawsuit also accused Binance of manipulating the market and violating anti-money laundering (AML) and know your customer (KYC) laws.
The CFTC’s complaint alleges that Binance and its affiliates made hundreds of millions of dollars in profits from its illegal futures trading activities, and that the exchange was aware of and actively concealed its non-compliance with US regulations. The lawsuit seeks monetary penalties, disgorgement of profits, and an injunction to prevent Binance from engaging in future violations.
In his blog post, CZ refuted the allegations made by the CFTC, stating that Binance does not trade for profit or manipulate the market under any circumstances. He argued that while Binance trades in a number of situations, this is mainly to convert cryptocurrencies from time-to-time to cover expenses in fiat or other cryptocurrencies, as its revenues are in crypto.
CZ also noted that Binance has a 90-day no-day-trading rule for employees to prevent them from actively trading. Employees are also prohibited from trading in futures, and are restricted from buying or selling coins where they have obtained private information about them.
The CEO emphasized that he observes these policies himself strictly and has never participated in Binance Launchpad, Earn, Margin, or Futures. He believes that the best use of his time is to build a solid platform that services their users.
Regarding the compliance allegations, CZ says that Binance.com has developed “best-in-class” technology to ensure compliance and currently has more than 750 people working to ensure their business operates within the bounds of AML and KYC laws. He also pointed out that Binance.com holds 16 licenses to offer digital asset trading services, the most of any cryptocurrency trading platform.
CZ called the recent CFTC filing both unexpected and disappointing, as Binance had been working cooperatively with the regulator for over two years. He also noted that the complaint appears to contain an incomplete recitation of facts.
Binance CEO CZ has rejected the allegations made by the CFTC in their lawsuit, arguing that Binance does not trade for profit or manipulate the market under any circumstances. He emphasized that Binance has strict policies in place to prevent employees from actively trading or using private information to buy or sell coins, and that the exchange is committed to complying with AML and KYC laws.
CZ believes that the recent filing by the CFTC is unexpected and disappointing, and that the complaint contains an incomplete recitation of facts. Binance.com has developed technology to ensure compliance and currently holds 16 licenses to offer digital asset trading services, the most of any cryptocurrency trading platform.
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