Breaking: Binance CEO CZ rejects allegations of market manipulation
The response comes in relation to a series of claims made by the CFTC in its March 27 complaint against Binance.
Binance CEO Changpeng ‘CZ’ Zhao has rejected allegations from the Commodities Futures and Trading Commission, arguing the company “does not trade for profit or ‘manipulate’ the market under any circumstances.”
The chief executive shared his first official response to the lawsuit in a March 28 blog post.
My Response to the CFTC Complaint | Binance Blog https://t.co/TadyotM7HN
— CZ Binance (@cz_binance) March 27, 2023
The CEO argued that while Binance “trades” in a number of situations, this is mainly to convert them “from time-to-time” to cover expenses in fiat or other cryptocurrencies, as its revenues are in crypto.
“Personally, I have two accounts at Binance: one for Binance Card, one for my crypto holdings. I eat our own dog food and store my crypto on Binance.com. I also need to convert crypto from time to time to pay for my personal expenses or for the Card.”
CZ was responding to the CFTC’s accusation that Binance traded on its own platform through about 300 “house accounts” and has not disclosed to its customers that Binance is trading in its own market in its Terms of Use or elsewhere.
The CFTC went on to say that Binance is keeping this information a “top secret” and that they’ve refused to respond to Commission-issued investigative subpoenas seeking information on its trading activity.
“On information and belief, Binance has not subjected the trading activity of Merit Peak, Sigma Chain, or its approximately 300 house accounts to any anti-fraud or anti-manipulation surveillance or controls […]”
Zhao noted that Binance has a 90 day no-day-trading rule for employees, adding:
“This is to prevent any employees from actively trading. We also prohibit our employees from trading in Futures.”
He went further to state that employees are restricted from buying or selling coins where they’ve obtained “private information” about them.
“I observe these policies myself strictly. I also never participated in Binance Launchpad, Earn, Margin, or Futures. I know the best use of my time is to build a solid platform that services our users,” he added.
Zhao called the recent CFTC filing both “unexpected and disappointing,” as it 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.”
Regarding the compliance allegations, CZ says 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 anti-money laundering (AML) and know your client (KYC) laws:
“To date, we have handled 55,000+ LE requests, and assisted US LE freeze/seize more than $125 million in funds in 2022 alone and $160 million in 2023 so far.”
Related: CFTC calls ETH a commodity in Binance suit, highlighting the complexity of classification
CZ also pointed out that Binance.com holds 16 licenses to offer digital asset trading services, the most of any cryptocurrency trading platform.
This is a developing story, and further information will be added as it becomes available.
