„Groundless“ – Binance CEO denies report of possible CFTC investigation
CZ states that its trading platform is strictly KYC and AML compliant, debunking the alleged allegations.
Shortly after Bloomberg reported on Friday that US regulators were said to have opened investigations into market-leading crypto exchange Binance, its co-founder and CEO Changpeng Zhao (CZ) spoke out with a denial.
In a question and answer session (AMA) on Clubhouse, CZ spontaneously commented on the allegations. „This is a very fresh report that is only a few minutes old,“ as the Binance CEO first stated. He then elaborated, „The news article in question never Crypto Genius mentions any wrongdoing on our part. I don’t have it in front of me, and I would have to read it again carefully, but as far as I know, Binance is not accused of any specific misconduct. So the article is making a mockery of itself.“
The crypto exchange’s CEO also points out that the company’s policy is not actually to comment on communications with authorities, but this would make it more difficult for Binance to effectively refute the allegations in the report, which cites an anonymous source.
Moreover, the launch of an investigation would not necessarily mean that the authorities are preparing charges against the trading platform. Rather, it could be a routine procedure, as Zhao points out.
In addition, CZ points to examples from the past in which similar stories arose due to misunderstandings, but which, just like the article about Binance, were „groundless“.
Therefore, the CEO of the market-leading crypto exchange suspects that „self-proclaimed competitors“ would try to feed journalists with dubious accusations in order to damage Binance’s reputation.
Zhao also knows how to fight back with legal remedies, as most recently his company sued the news magazine Forbes for defamation. The case was dropped earlier this month.
The possible investigations by the US supervisory authority for derivatives trading (CFTC), which are supposed to have as their subject whether the trading platform has also offered its services to American users illegally, are at least not completely pulled out of thin air. For last November, Zhao himself had admitted that American crypto users find „intelligent“ ways to circumvent their actual exclusion on Binance’s main platform.
However, as part of his latest denial, CZ defends its own information collection (KYC) and anti-money laundering (AML) measures.
„I can legitimately say that Binance has probably taken the most stringent measures to comply with KYC and AML,“ as he accordingly opines. To which he adds, „We are very careful and very strict about KYC and AML. In addition, we also use very smart geofencing.“
Rather, he says, the company’s own standards tend to be „too strict“, as users travelling to the US as tourists are often mistakenly blocked.
Nevertheless, he admits that American users repeatedly try to circumvent the existing blocks, which is why Binance still has to „improve“ them.
In conclusion, CZ expressed confidence that crypto companies and regulators will find a common middle ground:
„At the moment, there is still a gap in understanding between the crypto industry and the authorities. I would like to see both sides converge to close this gap.“