Four issues Binance CEO notes in his open address to the CFTC complaint

Binance CEO, Changpeng Zhao (CZ), has penned an official response to the Commodity Futures Trading Commission (CFTC), which alleged that the largest crypto exchange by market capitalization violated federal laws.

Today, the CFTC filed an unexpected and disappointing civil complaint, despite our working cooperatively with the CFTC for over two years.

Key points CZ addresses

According to CZ, "the complaint appears to contain an incomplete recitation of facts," adding that they disagree with the characterization of most of the claims made by the regulator.

The Binance executive has addressed several factors featured in the complaint, starting with Technology for Compliance and US blocks. In this regard, the CEO notes that the exchange boasts best-in-class technology for maximum compliance. He cites a mandatory Know Your Customer (KYC) program and tier-one Anti-Money Laundering (AML), blocking users on metrics of nationality, IP addresses, mobile carriers, device fingerprints, bank and blockchain deposits and withdrawals, and credit card bin numbers, among others.

Accordingly, the exchange's position is that:

We are aware of no other company using systems more comprehensive or more effective than Binance.

CZ then talks about Cooperation and Transparency with Law Enforcement, articulating the exchange's commitment to transparency and cooperation with regulators and law enforcement in the US and worldwide. Acknowledging having over 750 people in the exchange's compliance teams, most of whom have backgrounds in law enforcement and regulatory agency, CZ said that Binance has handled at least 55,000 law enforcement requests and collaborated with US authorities to freeze/seize over $125 million in funds in 2022 alone and $160 million in 2023, thus far.

On this note, he says:

We intend to continue to respect and collaborate with US and other regulators worldwide.

Regarding Registrations and Licenses, CZ asserts that with 16 thus far, Binance holds the highest number of licenses/registrations globally and is well-regarded by the exchange's user base.

On Trading, Zhao explains that "Binance does not trade for profit or "manipulate" the market under any circumstances." Instead, the exchange "trades" in multiple situations, with all revenues coming in crypto form. As such, "[the exchange] does not need to convert them from time to time to cover expenses in fiat or other cryptocurrencies.

CZ also highlights Binance having partners who provide liquidity for less liquid pairs, adding that it actively monitors these affiliates to ensure they do not have large profits.

Changpeng Zhao's accounts on Binance

Further, in the open address, CZ discloses having two accounts at Binance- "one for Binance Card and 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 further claims that the exchange has a "90-day no-day trading rule" for employees, preventing them from selling a coin within 90 days of their latest buy or vice versa. In so doing, the exchange ensures employees do not trade actively, alongside other measures, including a "no-futures trading" policy and stark regulations against buying or selling into listings and launchpads.

He closes with a no-bias assertion: "I strictly observe these policies." 

Also Read: How the CFTC lawsuit has inspired a new FUD wave in the Binance ecosystem