It’s been a rollercoaster 24 hours for Binance and its CEO Changpeng Zhao after the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against the crypto company. The lawsuit alleges that Binance had illegally offered leveraged and margin trading of digital assets in the US.
In response, Changpeng Zhao, Binance’s CEO, has issued a statement calling the allegations “shocking and disappointing” and a “vague recitation of facts.” Zhao also noted that the company will be able to “give full responses in due time.”
Changpeng Zhao Refutes CFTC’s Accusations
Binance’s CEO, Changpeng Zhao, publicly expressed shock and displeasure over the CFTC’s lawsuit, which he claims is a “vague recitation of facts.” Zhao denied all the allegations and promised to issue a full response soon.
He criticized the CFTC’s unexpected and unsatisfactory civil lawsuit, claiming that the exchange has remained compliant with the regulator’s policies. He disagrees with how the situation has been portrayed, as a preliminary examination shows that the complaint doesn’t accurately reflect the facts.
This lawsuit from the US regulator has come as a considerable surprise to Binance, the biggest crypto exchange. It is a significant setback as they have encountered previous warnings and enforcement actions from regulators.
Also read:The CFTC filed a lawsuit against Binance, charging the exchange with “numerous” violations of US regulations and asserting that its compliance measures are a “sham.” It accused the platform of coaching its “valuable US-based VIP customers” in various methods to bypass compliance checks, insider trading, and even market manipulation.
Binance Does Not Engage In Market Manipulation – CZ
In his reply, Zhao emphasized that Binance.com does not engage in trading for gain or “manipulate” the market in any way. He clarified that Binance usually converts its cryptocurrency earnings into fiat currency or other crypto assets to cover its expenditures.
He revealed that he has two separate Binance accounts, one for his Binance Card and another for his crypto assets. He and other Binance employees also observe a policy of not trading for 90 days after obtaining crypto assets.
Zhao noted that staff members could only purchase or sell Futures to stop their personnel from active trading. Additionally, those with access to confidential information related to listings, Launchpad, and so forth must adhere to additional stringent regulations.
The CFTC had accused Binance of operating 300 “house accounts” on its platform without informing its customers. After being issued a subpoena, the exchange kept it “top secret” and refused to provide any information about trading activity.
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