Binance CEO claims the move from CFTC is "unexpected and disappointing."
In response to a lawsuit filed by the Commodity Futures and Trading Commission (CFTC), Binance CEO Changpeng "CZ" Zhao shared a blog post commenting on the matter.
In the blog post, Zhao denied allegations that the cryptocurrency exchange manipulated the market or traded for profit. In the statement, CZ claimed that in its lawsuit, CFTC made "an incomplete recitation of facts."
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The CFTC's lawsuit suggests that Binance has been trading on its platform through 300 "house accounts" without disclosing this information in its Terms of Use. Furthermore, the commission alleges that Binance has kept this information a "top secret" and has not complied with investigative subpoenas seeking details about its trading activities.
However, CZ has countered these allegations by stating that Binance does engage in "trading" only under certain circumstances, such as to convert its crypto revenue to cover expenses in fiat or other cryptocurrencies. In its statement, Changpeng Zhao noted:
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 also addressed the accusations of "insider trading" involving Binance employees, clarifying that the company enforces a 90-day no-day-trading rule for its staff.
Moreover, CZ emphasized that employees are not allowed to buy or sell coins if they have access to "private information" about them. Zhao noted:
I observe these policies myself strictly. 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.
Changpeng Zhao called CFTC's recent filing "unexpected and disappointing," as Binance has been cooperating with the regulator for over two years.
The CFTC has also accused senior members of Binance of "actively facilitating violations of US law," including "assisting and instructing" customers on how to circumvent Binance's compliance controls, alleging that the exchange's compliance program was only "For Show." It is worth noting that the news about this instance publically broke on March 23rd.
