Breaking: Binance CEO CZ rejects allegations of market manipulation

Binance CEO Changpeng 'CZ' Zhao has allegations rejected from the Commodity 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, CEO answered to the CFTC's lawsuit accusing Binance and CZ of engaging in improper trading and compliance proceedings, calling the allegations an "incomplete recitation of the facts."

my response to the CFTC complaint | Binance Blog https://t.co/TadyotM7HN

—CZ Binance (@cz_binance) March 27, 2023

In its complaint, The CFTC alleged that Binance has traded on its own platform using 300 "internal accounts" and failed to make proper disclosures to its clients that it was trading on its own exchange in its Terms of Use.

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

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

However, C.Z. argument that while Binance "trades" in a number of situations, this is primarily to convert your crypto income to cover expenses in fiat or other cryptocurrencies.

“Personally, I have two accounts on Binance: one for Binance Card, one for my cryptocurrency. I eat our own dog food and store my cryptocurrency on Binance.com. I also need to convert cryptocurrency 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-trade rule for employees, adding:

“This is to prevent any employee from actively trading. We also prohibit our employees from trading futures.”

He went further by stating that employees cannot buy or sell coins when they have obtained "private information" about them.

“I myself strictly observe these policies. I have also never participated in Binance Launchpad, Earn, Margin or Futures. I know the best use of my time is to build a strong platform that serves our users,” he added.

Zhao called the CFTC's recent filing "unexpected and disappointing" as it had been working in cooperation with the regulator for more than two years.

The CFTC also alleged that senior members of the firm have "actively facilitated violations of US law," including "assisting and instructing" US clients on ways to evade their own violations. Binance compliance checks, adding that Binance's compliance program was "For Show" only.

Related: CFTC Calls ETH a Commodity in Binance Suit, Highlighting Complexity of Classification

However, CZ denied being negligent in enforcement efforts. He claimed that Binance.com has developed "best-in-class" technology to ensure compliance and currently has more than 750 people working to ensure that its business operates within the limits of anti-money laundering (AML) and know-your-customer (KYC) laws:

“To date, we have handled over 55,000 LE requests and have helped US LE freeze/seize over $125 million in funds in 2022 alone and $160 million in 2023 so far.”

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