Binance CEO Responds to CFTC Lawsuit: Facts and Clarifications

On March 28th, CZ, the CEO of Binance, released a response to the CFTC lawsuit on its official website, stating that Binance had cooperated with CFTC for more than two years and expressed disappointment at its civil lawsuit. After preliminary examination, the prosecution appears to contain incomplete factual statements. We do not agree with the description of many issues, including compliance technology and the prohibition of access by U.S. users, cooperation and transparency with law enforcement agencies, cooperation and transparency with law enforcement agencies, and transactions. It is disclosed that Binance currently has a compliance team of over 750 people, many of whom have a background in law enforcement and regulatory agencies. To date, Binance has processed more than 55000 law enforcement requests and assisted in freezing/seizing more than $125 million in funds. In 2022 and 2023 alone, it has frozen/seized $160 million.

CZ: Cooperated with CFTC for more than two years and disagreed with the description of many issues in its civil litigation

On March 28th, CZ, the CEO of Binance, released a response to the CFTC lawsuit on its official website, stating that Binance had cooperated with CFTC for more than two years and expressed disappointment at its civil lawsuit. After preliminary examination, the prosecution appears to contain incomplete factual statements. We do not agree with the description of many issues, including compliance technology and the prohibition of access by U.S. users, cooperation and transparency with law enforcement agencies, cooperation and transparency with law enforcement agencies, and transactions.

Background and Facts

Binance is a global cryptocurrency exchange that offers trading services for more than 100 cryptocurrencies. It was launched in 2017, and since then, it has become one of the largest cryptocurrency exchanges in the world, with more than 10 million registered users. The company is headquartered in Malta and has operations in several other countries.
In March 2021, the CFTC filed a civil lawsuit against Binance, accusing the company of violating U.S. commodity laws by allowing trading of cryptocurrency derivatives without registering with the agency. The CFTC also alleged that Binance had facilitated money laundering, and that it had failed to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations.

Clarifications

In his response, CZ clarified several issues related to the CFTC lawsuit, including compliance technology, prohibition of access by U.S. users, cooperation and transparency with law enforcement agencies, and transactions.

Compliance Technology

CZ stated that Binance uses advanced technology to monitor and detect money laundering and other illegal activities on its platform. He pointed out that Binance has invested heavily in compliance infrastructure and has a compliance team of over 750 people, many of whom have a background in law enforcement and regulatory agencies. CZ also mentioned that Binance has processed more than 55,000 law enforcement requests and assisted in freezing/seizing more than $125 million in funds.

Prohibition of Access by U.S. Users

CZ clarified that Binance had implemented measures to prohibit U.S. users from accessing its platform, in compliance with U.S. laws and regulations. He pointed out that Binance had stopped serving U.S. users in September 2019, and had subsequently implemented measures to prevent access by U.S. users, including IP blocking and geolocation blocking.

Cooperation and Transparency with Law Enforcement Agencies

CZ stated that Binance had always cooperated with law enforcement agencies around the world, including the CFTC. He mentioned that Binance had a dedicated team for handling law enforcement requests, and that it had complied with such requests in a timely and transparent manner. He also pointed out that Binance had shared information related to suspicious activities and transactions with law enforcement agencies.

Transactions

CZ clarified that Binance’s trading platform is designed to allow users to trade cryptocurrencies with each other, and that the company does not participate in any trading activities. He pointed out that Binance does not set prices or manipulate markets, and that it does not engage in any activities that could be considered market abuse.

Conclusion

In his response to the CFTC lawsuit, CZ clarified several issues related to Binance’s compliance technology, prohibition of access by U.S. users, cooperation and transparency with law enforcement agencies, and transactions. He expressed disappointment at the civil lawsuit and stated that Binance would continue to work with law enforcement agencies to combat illegal activities in the cryptocurrency industry.

FAQ

1. Does Binance allow U.S. users to trade on its platform?
No, Binance has implemented measures to prohibit U.S. users from accessing its platform, in compliance with U.S. laws and regulations.
2. Does Binance comply with AML and KYC regulations?
Yes, Binance has invested heavily in compliance infrastructure and has a compliance team of over 750 people, many of whom have a background in law enforcement and regulatory agencies.
3. Does Binance participate in any trading activities?
No, Binance’s trading platform is designed to allow users to trade cryptocurrencies with each other, and the company does not participate in any trading activities.