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Binance CEO refuses to back down amidst CFTC’s damning allegations

Binance CEO refuses to back down amidst CFTC's damning allegations

After the United States Commodity Futures Trading Commission (CFTC) sued the world’s largest cryptocurrency trading platform Binance, its co-founder and CEO Changpeng Zhao, and its former chief compliance officer Samuel Lim, for allegedly breaking trading rules, the crypto exchange chief did not stay silent to the accusations.

Indeed, the CFTC has accused the Binance team of running an “illegal digital asset derivatives exchange” with an “ineffective compliance program,” as well as “willful evasion” of U.S. law “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit,” to which CZ shared his response on March 27.

CZ’s response

According to his retort, the civil complaint filed by the regulator was “unexpected and disappointing,” particularly in light of “our working cooperatively with the CFTC for over two years.” As he continued:

“Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint.”

Furthermore, CZ addressed the main points of the complaint, stating that Binance blocked U.S. users “by nationality (KYC), IP (including commonly used VPN endpoints outside of the US), mobile carrier, device fingerprints, bank deposit and withdrawals, blockchain deposits and withdrawals, credit card bin numbers, and more.”

The Binance boss said the platform “does not trade for profit or ‘manipulate’ the market under any circumstances,” stressing that the team needed to convert the revenues “from time-to-time to cover expenses in fiat or other crypto currencies,” as well as highlighting it had “affiliates that provide liquidity for less liquid pairs” who are “monitored specifically not to have large profits.”

Additionally, he assured that “Binance is committed to transparency and cooperation with regulators and law enforcement (LE) – in the US and globally,” featuring “more than 750 people in our Compliance teams, many with prior law enforcement and regulatory agency backgrounds,” who have even assisted the U.S. officials in asset seizures.

CFTC and regulating crypto

In October 2022, CFTC said in a press release that more than 20% of its actions during the fiscal year were related to cryptocurrencies, and the agency “continued to devote significant resources to litigating complex cases and achieved several litigation successes.” 

Earlier, in August, its chairman Rostin Benham said the agency was ready to take on crypto regulation in the future, after which he said he had already authorized his agency to begin preparing to become the leading crypto regulator under which Bitcoin (BTC) and other digital assets could flourish.

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