Changpeng Zhao (CZ), the CEO of the leading global crypto exchange Binance, has refuted recent allegations by the U.S. Commodity and Future Trading Commission (CFTC) claiming that the company violated multiple federal rules.
In its civil complaint filed against Binance, CZ, and Samuel Lim, the exchange’s compliance officer, the CFTC alleged that the firm traded on its own platform using 300 home accounts without disclosing to users on its terms of use that it was partaking in crypto trading.
The regulator also said in the lawsuit that Binance concealed the information from the public and failed to honor the Commission’s subpoena for information on the company’s trading activities.
Binance was also accused of market manipulation and non-compliance with U.S. laws by offering unregistered tokens, such as bitcoin (BTC) and ether (ETH), labeled as commodity products to customers nationwide.
Binance CEO Responds to CFTC Lawsuit
CZ has responded to the allegations arguing that Binance has the best-in-class technology to ensure compliance with law enforcement agencies worldwide, including the U.S.
The Binance chief said the company restricts American users from accessing the platform. Due to the know-your-customer (KYC) protocols implemented on the exchange, the firm detects U.S. users through their registered mobile carrier, bank deposits, withdrawals, and device fingerprints.
Regarding the market manipulation allegation, CZ said that Binance only trades on the platform when the firm wants to convert its revenue which is in crypto, to fiat or other virtual assets to cover expenses.
He further stated that the company has affiliates that provide liquidity to fewer liquid pairs. However, the firms are monitored to prevent them from making large profits.
Zhao further disclosed that Binance implemented a 90-day no-trade rule for employees. The law prohibits staff from selling off tokens immediately after purchase.
In terms of compliance with regulators, CZ said that the exchange is committed to transparency and works with different law enforcement across the world. He also disclosed that the firm has 750 employees on its compliance team from diverse backgrounds.
“We are collaborative with regulators and government agencies all around the world. While we are not perfect, we hold ourselves to a high standard, often higher than what existing regulations require. Above all, we believe in doing the right thing for our users at all times. In this journey towards freedom of money, we do not expect everything to be easy. We do not shy away from challenges,” CZ said.
Your crypto deserves the best security. Get a Ledger hardware wallet for just $79!
