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Changpeng Zhao: CFTC’s Binance allegations ‘an incomplete recitation of facts’

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  • Binance CEO Changpeng Zhao has responded to the allegations made by the U.S. CFTC in its civil complaint.
  • Zhao listed the steps taken by his crypto exchange to ensure compliance with U.S. laws and policies.

Changpeng Zhao, the man behind the world’s largest crypto exchange Binance, has responded to the civil lawsuit brought by the U.S. Commodities and Futures Trading Commission (CFTC). The civil complaint has been described as “unexpected and disappointing”, despite over two years of collaboration with the federal regulator. 

Changpeng Zhao: We don’t agree with the characterization of the allegations 

In a blog post by Binance earlier today, Changpeng Zhao claimed that the CFTC’s complaint contained an incomplete recitation of facts. The CEO did not agree with the characterization of several issues alleged in the regulator’s complaint. Of the several issues alleged, CZ responded to four key issues, with more to come in due course. 

The blog post stated out by reiterating:

“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.”

Speaking on Binance’s compliance with U.S. laws and policies, Zhao stated that his exchange had in place the best-in-class technology to ensure compliance. This included the highest standards in know-your-customer (KYC) and anti-money laundering (AML). He added that users from the United States are blocked through various identifying factors. Some of these measures were IP address, device fingerprints, credit card bin numbers, and more. 

According to Zhao, Binance has handled over 55,000 law enforcement requests to date, assisting in the seizure/freezing of $160 million since the beginning of 2023. He highlighted the exchange’s commitment to transparency and cooperation with regulators and law enforcement agencies. The CEO also boasted the 16 licenses/registrations that his firm held globally. 

Changpeng Zhao clarified that he personally held two accounts at Binance: one for Binance Card and one for his crypto holdings. He said:

“I also never participated in Binance Launchpad, Earn, Margin, or Futures. I know the best use of my time is to build a solid platform that services our users.”

As for the exchange’s employees, there is a 90 day no-day-trading rule in place to ensure that no employee is actively trading. Furthermore, employees are prohibited from training in Futures. 

Binance’s BNB token took a significant hit following the CFTC’s lawsuit. The token has lost over 5% of its value since the news broke, and was trading at $311 at press time. In the immediate aftermath of the announcement, BNB sank as low as $306. Meanwhile, Paxos Trust Company has burned more than $155 million of Binance USD [BUSD].

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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