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HomeCrypto NewsMarket'I Eat Our Own Dog Food,' Binance's CZ Responds to CFTC Lawsuit

‘I Eat Our Own Dog Food,’ Binance’s CZ Responds to CFTC Lawsuit

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Binance accuses the CFTC of mischaracterizing the facts.

Binance Chief Executive Officer Changpeng Zhao, also known as CZ, has officially responded to the latest United States Commodity Futures Trading Commission (CFTC) suit against him and his crypto exchange. 

As highlighted by The Crypto Basic in a tweet today, the U.S. market regulator accused the company and its CEO of ignoring criminal activity on its platform and actively concealing its violations of U.S. restrictions. The CFTC claims that Binance helped onboard U.S. customers despite restrictions against this and its claims otherwise. In addition, Zhao and other entities believed to be directly or indirectly owned by the crypto exchange are accused of proprietary trading on its platform without proper disclosures. 

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In the statement released by Zhao yesterday, the Binance chief dismisses these accusations as “an incomplete recitation of facts.” Furthermore, Zhao states that the crypto exchange refutes the CFTC’s “characterization” of the abovementioned issues.

Zhao stated that despite the regulator’s claim of lax compliance efforts at the crypto exchange, it had invested more than most in this area. Binance employs “best-in-class” technology to enforce Know Your Customer (KYC), anti-money laundering (AML) and geofencing rules, claims the Binance chief. 

In addition, Zhao noted that the company’s 750-man compliance team has responded to over 55,000 law enforcement requests. In the U.S., the team helped law enforcement seize over $125 million worth of assets in 2022, Zhao said, placing the number at $160 million already in 2023.

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Furthermore, the executive has wholly refuted alleged market manipulation claims from undisclosed trading activity. 

“Binance.com does not trade for profit or ‘manipulate’ the market under any circumstances,” the statement read.

Per the statement, Binance and its affiliates only engage in trading activity to convert crypto earnings to cover fiat expenses or provide liquidity for less liquid trading pairs.

Zhao also admits to holding accounts on the platform for his crypto holdings and personal expenses. The statement read:

“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.”

To explain, “I eat our own dog food,” CZ Shared another tweet.

 

In addition, the crypto exchange maintains a 90-day no-trading rule, which prevents employees from selling crypto assets less than 90 days after a recent purchase, as highlighted by Zhao. Moreover, the executive said employees with access to information regarding asset listing are also restricted from trading them.

“I observe these policies myself strictly,” Zhao added.

Amid all these, Zhao, in the statement, describes the CFTC complaint as “unexpected and disappointing.”

The CFTC case against Binance is the latest in a growing list of crypto enforcement actions from U.S. regulators this year. As highlighted by Bloomberg columnist Matt Levine in an opinion piece shared by Zhao, the biggest gripe, in this case, is that Binance allegedly allowed Americans to use its derivative trading platform. So far, there are no allegations of fraud or mismanagement of user funds. 

As highlighted in a previous report, the leading crypto exchange had expressed willingness to pay fines for past “mistakes” when developers largely operated it with limited knowledge of rules regarding money laundering and economic sanctions.

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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Okoya David
Okoya David
Okoya David Kio is a crypto enthusiast passionate about understanding what makes the nascent market tick. When he's not pondering about cryptocurrencies, you might find him in a BP debate room trying to proffer solutions to age-old societal problems.

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