CZ's Full Response to CFTC Allegations
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CZ's Full Response to CFTC Allegations
On the evening of March 27, Bloomberg reported that the CFTC filed a lawsuit against Binance, its CEO CZ, and its first Chief Operating Officer Samuel Lim.
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Written by: CZ
Translated by: Moni, Odaily
On the evening of March 27, Bloomberg reported that the U.S. Commodity Futures Trading Commission (CFTC) had filed a lawsuit against cryptocurrency exchange Binance and its CEO CZ, along with Samuel Lim, the company’s first Chief Operating Officer, at a federal court in Chicago.
On March 28, CZ published a response on Binance’s official website. The full text is as follows:
Today, despite more than two years of cooperation between Binance and the CFTC, the CFTC has filed an unexpected and disappointing civil complaint. Upon preliminary review, the complaint appears to contain incomplete factual statements. Binance disagrees with how many of the allegations are framed. While Binance can only provide a full response at the appropriate time, this article will address several key points.
Compliance and U.S. Blocking Technology
Binance.com has developed best-in-class technology to ensure compliance and was the first global (non-U.S.) exchange to implement a mandatory KYC program. Today, it remains one of the exchanges with the highest KYC and AML standards.
Binance blocks U.S. users through nationality (KYC), IP addresses (including commonly used non-U.S. VPN endpoints), mobile carriers, device fingerprinting, bank deposits and withdrawals, blockchain deposits and withdrawals, credit card numbers, and more.
To our knowledge, no other company uses a more comprehensive or effective system than Binance to meet compliance requirements.
Cooperation with Law Enforcement and Transparency
Binance is committed to transparency and cooperating with regulators and law enforcement agencies in the United States and globally. Binance’s compliance team currently consists of over 750 people, many of whom have backgrounds in law enforcement and regulatory agencies.
To date, Binance has processed over 55,000 law enforcement requests. In 2022 alone, we assisted U.S. law enforcement in freezing/seizing over $125 million in funds, and so far in 2023, this amount has reached $160 million.
Binance will continue to respect and cooperate with regulators in the United States and around the world.
Registrations and Licenses
Binance.com holds more licenses/registrations than any other global platform, currently totaling 16, with this number continuing to grow.
Trading
Under no circumstances does Binance.com trade for profit or "manipulate" markets.
Binance's "trading" occurs under several circumstances:
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Binance earns revenue in cryptocurrency,
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Binance occasionally needs to convert cryptocurrencies to pay expenses in fiat currency or other cryptocurrencies,
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Binance has affiliates that provide liquidity for less liquid cryptocurrency pairs, but these affiliated companies are specially monitored and cannot make significant profits from these cryptocurrencies.
Personally, I have two accounts on Binance:
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One for the Binance Card,
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One for my crypto assets.
I use our own products and store my cryptocurrencies on Binance.com. I also need to convert cryptocurrencies from time to time to cover personal expenses or card spending.
Regarding employees, Binance.com has a 90-day prohibition on day trading, meaning employees cannot sell tokens within 90 days after their last purchase, or vice versa—this rule is designed to prevent active trading by employees. Binance also prohibits our employees from engaging in futures trading.
Furthermore, Binance has strict policies prohibiting anyone with access to private information—such as listing details, Launchpad projects, etc.—from buying or selling those tokens.
I personally strictly adhere to these policies. I have never participated in Binance Launchpad, Earn, Margin, or Futures. I know I must dedicate my time to building a reliable platform to serve Binance’s users.
At Binance, we seek amicable resolutions to all issues and actively cooperate with regulators and government agencies worldwide. While Binance is not perfect, we uphold high standards—often exceeding existing regulatory requirements. Above all, Binance believes in doing the right thing for users at all times. On the journey toward financial freedom, Binance does not expect everything to be smooth sailing—but we never shy away from challenges.
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