“We do not agree with the characterization” of many of the U.S. commodities regulator’s allegations, Binance CEO CZ said.
CZ Defends Binance Practices
Binance CEO Changpeng Zhao (CZ) said the U.S. Commodities and Futures Trading Commission (CFTC) has given “an incomplete recitation of facts” in its recently filed civil complaint against the largest Centralized Exchange in crypto.
In an official response published by Binance, CZ said, “we do not agree with the characterization of many of the issues alleged in the” … “unexpected and disappointing civil complaint, despite our working cooperatively with the CFTC for over two years.”
He said, “At Binance, we look for amicable solutions to all problems. 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.”
The statement on Binance Blog follows CZ’s initial reaction on his personal Twitter account – “4” – which is a reference to his resolution not to respond to “fake news,” FUD or attacks on Binance.
CZ’s statement addresses certain allegations in the federal lawsuit against Binance, himself and former Chief Compliance Officer Samuel Lim from the U.S. commodities regulator, which is requesting a jury trial and seeking monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the law.
In the statement, CZ defends Binance’s mandatory KYC program and technological applications, states that Binance has helped U.S. law enforcement freeze/seize nearly $300 million since the beginning of 2022, and declares that Binance has 16 registrations and licenses globally, the highest in the industry.
CZ also states that Binance does not trade to make profits, only to convert crypto revenues to cover expenses in fiat or other cryptocurrencies.
“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,” CZ said.
CZ said he strictly observes company policies on trading, including minimum holds of 90 days on any token purchased, and has never participated in Binance offerings such as Launchpad, Earn, Margin or Futures.
“I know the best use of my time is to build a solid platform that services our users,” CZ said.
The CFTC lawsuit has apparently already impacted confidence in Binance and the broader crypto market, and will continue to be a source of uncertainty and speculation as it progresses. However, some observers are already questioning the substance of the complaint, the current relevance of the allegations since Binance updated its KYC policies several years ago, and the potential outcome of the proceedings beyond Binance paying a substantial (but feasible) fine.
Twitter user Rocket, who claims to be an “actual attorney,” posted their observations and predictions in a thread, equating Binance’s situation with that of traditional banks who elect to pay fines rather than follow unworkable regulations.
“Lawsuit is a punitive measure based on 2019 issues and will be settled for sub-$100mm,” said Rocket, who is followed by CZ on Twitter.
What is Binance:
Binance positions itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. The Binance platform aims to increase the freedom of money for users and features a comprehensive portfolio of crypto-asset products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization, and infrastructure solutions.
