Today, the U.S. Commodities and Futures Trading Commission (CFTC) filed a lawsuit against crypto exchange Binance and its CEO, Changpeng “CZ” Zhao. The regulator is accusing the executive and the company of allegedly violating trading rules in the country.
In an official blog post, Zhao replied to the complaint and classified them as “unexpected” and “disappointing.” The executive claims that the company has worked with the U.S. regulator since 2021. Zhao said:
(…) 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.
BNB’s trends to the downside on the daily chart. Source: BNBUSDT Tradingview
Binance CEO Eats The Company’s “Dog Food”?
Zhao breakdown the charges, including Binance’s capacity to enforce compliance with U.S. trading rules. The crypto exchange’s CEO claims the platform has implemented a mandatory Know Your Customer (KYC) program and Anti Money Laundering rules for all customers.
Furthermore, Zhao claims that Binance has the technological capability to “block” U.S. users from accessing its international platform. Therein, users can trade crypto options and perpetual futures contracts with leverage.
In that sense, the statement denied that Binance uses its platform to trade against its customers. It only allows certain institutional partners to provide liquidity in several “less liquid pairs” for a “small profit.” Zhao himself denied that he benefits from trading on the crypto exchange:
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.
The crypto exchange claims that it has implemented additional restrictions to prevent employees from manipulating or taking profits on newly listed tokens and other products. Any information regarding listing, launchpad, and privilege data is kept under “strict policies for anyone.”
Binance Already Suffering From CFTC Action
Zhao also said that the crypto exchange is cooperating with law enforcement agencies to prevent illegal activity on the platform. As a result, these agencies have been able to freeze over $125 million in funds from compliance and law enforcement actions in 2022 and $160 million in 2023.
Despite using the exchange for his personal life, Zhao denied that he benefits from its financial products:
(…) 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. At Binance, we look for amicable solutions to all problems. We are collaborative with regulators and government agencies all around the world.
As Bitcoinist reported earlier today, the CFTC’s action is allegedly trying to “protect” U.S. customers by limiting access to the “volatile and risky digital asset market.” It remains to be seen if the legal action will have a lasting impact on Binance’s commercial activities.
Binance net outflows have started
-$307m last 24hrs
-$145m last 1hr
Will be watching this over the next few days.
This is not surprising, as it doesn't make much sense to keep as much risk there as you had last week. Will see if this leads to panic when Asia wakes up pic.twitter.com/1AJQL6PXx4
— Evanss6.eth (@Evan_ss6) March 27, 2023
Bitcoin has hit a new all-time high of $109,000, driven by optimism ahead of President-elect Trump’s 20 January inauguration. As speculation grows over potential crypto-friendly policies, the question remains—can Bitcoin sustain its momentum and climb even higher?
KikyoPublic Investment Bank Bhd predicts that President-elect Trump’s administration is unlikely to fully reverse Biden’s AI chip export restrictions and computing capacity limits. As Biden’s term ends, could these measures be a strategic parting move with lasting implications for the tech landscape?
CatherineVitalik Buterin’s update to his profile picture, using an image from the Milady Maker collection, triggered a significant increase in the collection's floor price and trading volume. The NFT's market capitalisation rose to $21 million, with notable gains for the related CULT token and other Remilia collections.
AnaisIndonesia is considering a law to restrict social media access for children to protect them from online dangers, though concerns about privacy and data security have arisen. Many parents support the measure, but advocates call for a balance between child protection and digital rights.
WeatherlyThe Trump administration omitted cryptocurrency from its priority list and inaugural speech, triggering an over 30% drop in Trump’s meme coin. While optimism persists, concerns over long-term support are growing.
CatherineArthur Hayes is skeptical about Donald Trump's plan to establish a U.S. Bitcoin reserve, questioning its practicality and priority among other government needs. Despite Trump's past interest in crypto, Hayes believes the Bitcoin reserve is unlikely to happen, as other political concerns will take precedence.
JoyWith Gary Gensler out as SEC Chair, the crypto industry celebrates. President Trump has named Commissioner Mark Uyeda as acting chair until Paul Atkins is confirmed by the Senate.
KikyoSam Altman took to X to temper growing excitement about OpenAI's progress, addressing speculation that the company had secretly achieved superintelligence. He, along with other team members, worked to quell the hype and clarify the company's current capabilities.
CatherineGoogle Trends shows a surge in interest in buying cryptocurrency, driven by President Trump’s meme coin launch, inauguration, and anticipation of crypto-friendly policies, which has propelled digital assets into the mainstream.
KikyoThe launch of President Trump's Department of Government Efficiency (DOGE) has faced multiple lawsuits challenging its legality and transparency. Despite these legal hurdles, Elon Musk continues to lead the panel, while Vivek Ramaswamy steps down to run for Ohio governor.
Weatherly
