hangpeng Zhao, the CEO of Binance, dismissed allegations made by the Commodities Futures and Trading Commission, stating that the exchange does not engage in market manipulation or profit-oriented trading. He responded to the CFTC's recent lawsuit, which accused Binance and himself of inappropriate trading practices and compliance procedures.
In a blog post published on March 28, the CEO referred to the allegations as an incomplete recitation of facts.
According to the CFTC's complaint, Binance has been trading on its platform through 300 "house accounts" without disclosing to its customers that it was participating in its own market under its Terms of Use.
In addition, the CFTC has alleged that Binance kept this information confidential and refused to comply with investigative subpoenas issued by the commission to disclose its trading activity. The statement further states that Binance has not implemented any anti-fraud or anti-manipulation surveillance or controls over the trading activities of Merit Peak, Sigma Chain, or its 300 house accounts, according to the CFTC's information and belief.
Despite the accusations, CZ contended that Binance does engage in trading activities, but mainly for the purpose of converting crypto revenue to cover expenses in fiat or other cryptocurrencies.
In addition, CZ denied accusations of insider trading by his staff and stated that Binance has a 90-day no-day trading rule for employees, preventing them from actively trading. Furthermore, the CEO mentioned that Binance employees are prohibited from trading in Futures.
He also shared that he personally holds two accounts at Binance - one for his Binance Card and the other for his crypto holdings - and uses them to store his crypto and convert it from time to time to pay for personal expenses or for the card.
Moreover, CZ emphasized that Binance employees are not allowed to buy or sell coins based on private information they have obtained about them. He stated that he strictly observes these policies himself and has never participated in Binance Launchpad, Earn, Margin, or Futures.
According to CZ, his time is best spent building a robust platform that serves Binance's users. He also expressed disappointment and surprise at the recent CFTC filing, as Binance had been cooperating with the regulator for over two years.
Additionally, the CFTC claimed that Binance's senior members had been actively violating U.S. law by assisting and instructing U.S. customers on ways to circumvent the exchange's compliance controls. The commission also alleged that Binance's compliance program was merely "For Show."
Nonetheless, CZ refuted claims of being careless in compliance efforts and emphasized that Binance.com has developed best-in-class technology to ensure compliance. He mentioned that the business currently has a team of over 750 people working to ensure compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) laws, having handled more than 55,000 LE (law enforcement) requests to date.
Furthermore, CZ shared that Binance.com has assisted US law enforcement in freezing/seizing over $125 million in funds in 2022 and $160 million in 2023 so far. The CEO also highlighted that Binance.com holds 16 licenses, making it the cryptocurrency trading platform with the most licenses to offer digital asset trading services.
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