The U.S. government continues to crack down on cryptocurrencies. On March 27, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and Changpeng Zhao (CZ) on charges of violating regulatory measures and violating trading and Derivatives regulations. The news shocked the global currency circle. Changpeng Zhao issued a statement today (28th) saying that although the two parties have cooperated for more than two years, the CFTC still filed a civil lawsuit against Binance, which is "unexpected and disappointing."
Changpeng Zhao noted that after a preliminary review, the CFTC's lawsuit contained "an incomplete statement of facts" and disagreed with the content of multiple allegations.
The CFTC filed a lawsuit in the U.S. District Court for the Northern District of Illinois on the 27th, accusing Binance of operating Derivatives trading business in the U.S., providing derivatives trading services including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC ), USDT and BUSD. Cryptocurrency transactions within the U.S., which the lawsuit says are considered "commodities." The suit also accuses Changpeng Zhao of instructing company employees to use virtual networks (VPNs) to disguise their locations and make it appear that merchandise transactions are taking place outside the United States.
The CFTC said Changpeng Zhao exaggerated touted Binance’s compliance technology, including the exchange’s KYC real-name authentication mechanism.
In this regard, Changpeng Zhao pointed out that Binance has developed first-class technology to ensure compliance. "Binance.com" is the first non-US exchange in the world to implement mandatory KYC requirements, and has been reviewing nationality, IP (including those outside the United States) Commonly used VPN endpoints), telecommunications providers, device fingerprints, bank deposits and withdrawals, blockchain deposits and withdrawals, credit card numbers, etc. to block US users. He added:
To our knowledge, no other company uses a more comprehensive or efficient system than Binance.
Binance’s compliance team has as many as 750 people, “many of whom have backgrounds in law enforcement and regulators,” Zhao wrote, noting that Binance holds 16 licenses and registrations around the world.
In response to Binance and Changpeng Zhao's alleged market manipulation and self-trading allegations, Changpeng Zhao responded that "Binance.com" will not trade for profit or "manipulate" the market under any circumstances. He said:
Our income comes from cryptocurrencies. We do need to convert cryptocurrencies from time to time to cover fees. We have affiliates that provide Liquidity for less Liquidity currency pairs. These affiliates are specially monitored and cannot make large profits.
Personally, Changpeng Zhao stated that he has two accounts on Binance: one is Binance Card, and the other is used to hold and store his personal cryptocurrency assets, and needs to convert cryptocurrency into fiat from time to time. currency to pay for personal expenses or card fees.
Changpeng Zhao also stated that he has never personally participated in activities such as Binance Launchpad, Earn, Margin or Futures.
Changpeng Zhao emphasized that “Binance.com” has strict trading regulations for employees, and they are not allowed to sell within 90 days after purchasing cryptocurrency, and vice versa. At the same time, Binance also banned employees from futures trading.
Changpeng Zhao mentioned that Binance will still respect and cooperate with regulatory authorities in the United States and around the world. Binance also stated that the best way forward is to continue to protect users while working with regulators to develop a clear regulatory framework.
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