CZ recently rebuffed the CFTC complaint calling for a permanent US injunction against Binance and its executives.
Binance CEO Changpeng ‘CZ’ Zhao has responded to the Commodity Futures Trading Commission (CFTC) complaint against the exchange. Responding to the federal agency’s call for a US injunction against Binance, CZ raised several issues alleged in the complaint. CZ also said that the CFTC filed the “unexpected and disappointing civil” complaint despite Binance’s prior cooperation with the agency. Pointing out the exchange’s two-year cooperation with the CFTC, Zhao addressed a few key points raised by the government agency.
The CFTC’s complaint seeks a permanent trading and registration ban on Binance because the exchange supposedly lacks control over possible illicit transactions. In addition, the Washington, DC-headquartered Commission also accused Binance of secret trading on its own platform. According to the CFTC, the exchange’s executives were aware of and approved these illegal schemes.
CZ Detailed Response to CFTC Complaint
However, CZ countered the CFTC’s claims of non-compliance, saying:
“Binance has developed best-in-class technology to ensure compliance. Binance.com is the first global (non-US) exchange to implement a mandatory KYC program, and remains today to have one of the highest standards in KYC and AML.”
The Binance CEO further elaborated on how the company enforces its airtight compliance program. These include mobile carriers, device fingerprints, and blockchain deposits and withdrawals. According to Zhao, no other company uses compliance systems more effective or comprehensive than Binance.
On trade manipulation accusations and duplicity, the Binance chief executive said:
“Binance does not trade for profit or “manipulate” the market under any circumstances. Binance “trades” in a number of situations. Our revenues are in crypto. We do need to convert them from time to time to cover expenses in fiat or other crypto currencies. We have affiliates that provide liquidity for less liquid pairs. These affiliates are monitored specifically not to have large profits.”
CZ also stated Binance’s commitment to “transparency and cooperation with regulators and law enforcement” within and outside the US. The CEO revealed that the world’s largest crypto exchange employs more than 750 people in its compliance teams. According to Zhao, many of these individuals have law enforcement and regulatory agency backgrounds. CZ also said Binance’s compliance team continues to collaborate with the US and other regulators across the globe.
On registration and licenses, Zhao pointed out that Binance leads the field globally with 16 licenses/registrations “and counting.” In his opinion, this development reflects how well the user community regards Binance as a crypto exchange powerhouse.
CFTC Has Bone to Pick with Binance
The CFTC used several private communications and company documents to support its complaint against Binance. Also citing Zhao and Binance executive Samuel Lim in its federal complaint, the CFTC called for criminal action against the duo.
The commission also raised other distinct issues against the leading crypto exchange. It stated that Binance USD and Litecoin are commodities and raised issues about whether Binance.US is separate from Binance. In addition, the CFTC mentioned Binance’s VIP Program for large accounts and questioned its sincerity. According to the agency, the VIP Program is complicit in obfuscating its users’ activities from law enforcement.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.