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Breaking: Binance CEO CZ rejects allegations of market manipulation

Changpeng ‘CZ’ Zhao has refuted claims made by the Commodities Futures and Trading Commission in its March 27 complaint against Binance.

Breaking: Binance CEO CZ rejects allegations of market manipulation Own this piece of history

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Binance CEO Changpeng “CZ” Zhao has rejected allegations from the Commodities Futures and Trading Commission, arguing that the crypto exchange “does not trade for profit or ‘manipulate’ the market under any circumstances.”

In a March 28 blog post, the chief executive responded to the CFTC’s lawsuit accusing Binance and CZ of engaging in improper compliance procedures and trading, calling the allegations “an incomplete recitation of facts.”

In its complaint, the CFTC alleged that Binance has traded on its own platform using 300 “house accounts” and did not make the proper disclosures to its customers that it was trading in its own market in its Terms of Use.

The CFTC has also accused Binance of keeping the information a “top secret” and alleged that the exchange refused to respond to commission-issued investigative subpoenas seeking information on its trading activity.

“On information and belief, Binance has not subjected the trading activity of Merit Peak, Sigma Chain, or its approximately 300 house accounts to any anti-fraud or anti-manipulation surveillance or controls,” the statement added.

However, CZ argued that while Binance “trades” in a number of situations, this is mainly to convert its crypto revenue 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 I also need to convert crypto from time to time to pay for my personal expenses or for the Card,” he added.

CZ also refuted claims that his staff engaged in “insider trading,” stating that Binance has a 90-day no-day-trading rule for employees, adding: 

He went further to state that employees are restricted from buying or selling coins where they’ve obtained “private information” about them.

“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,” he added.

Zhao called the recent CFTC filing both “unexpected and disappointing,” as it had been working cooperatively with the regulator for over two years.

The CFTC also alleged that senior members of the firm have “actively facilitated violations of U.S. law,” including “assisting and instructing” U.S. customers on ways to evade Binance’s own compliance controls, adding that Binance’s compliance program was just “For Show.”

However, CZ denied being lax in compliance efforts. He stated that has developed “best-in-class” technology to ensure compliance and currently has more than 750 people working to ensure the business operates within the bounds of Anti-Money Laundering (AML) and Know Your Customer (KYC) laws:

CZ also pointed out that holds 16 licenses to offer digital asset trading services, the most of any cryptocurrency trading platform.