CZ’s Response to the CFTC Complaint
Today, the CFTC filed an unexpected and disappointing civil complaint, despite our working cooperatively with the CFTC for over two years.
Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint. While we will only be able to give full responses in due time, we will address a few key points below.
Technology for Compliance & US Blocks. Binance.com has developed best-in-class technology to ensure compliance. Binance.com is the first global (non-US) exchange to implement a mandatory KYC program, and remains today to have one of the highest standards in KYC and AML. We block US users by nationality (KYC), IP (including commonly used VPN endpoints outside of the US), mobile carrier, device fingerprints, bank deposit and withdrawals, blockchain deposits and withdrawals, credit card bin numbers, and more.
We are aware of no other company using systems more comprehensive or more effective than Binance.
Cooperation and Transparency with Law Enforcement. Binance is committed to transparency and cooperation with regulators and law enforcement (LE) — in the US and globally. Binance currently has more than 750 people in our Compliance teams, many with prior law enforcement and regulatory agency backgrounds. To date, we have handled 55,000+ LE requests, and assisted US LE freeze/seize more than $125 million in funds in 2022 alone and $160 million in 2023 so far.
We intend to continue to respect and collaborate with US and other regulators around the world.
Registrations and Licenses. Binance.com holds the highest number of licenses/registrations globally, 16 and counting, and is well regarded by our user community.
Trading. Binance.com does not trade for profit or “manipulate” the market under any circumstances. Binance “trades” in a number of situations. Our revenues are in crypto. We do need to convert them from time-to-time to cover expenses in fiat or other crypto currencies. We have affiliates that provide liquidity for less liquid pairs. These affiliates are monitored specifically not to have large profits.
Personally, I have two accounts at Binance: one for Binance Card, 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.
Binance.com has a 90 day no-day-trading rule for employees, meaning you are not allowed to sell a coin within 90 days of your most recent buy, or vice versa. This is to prevent any employees from actively trading. We also prohibit our employees from trading in Futures. Further, we have strict policies for anyone with access to private information, such as details of listings, Launchpad, etc. They are not allowed to buy or sell those coins.
I observe these policies myself strictly. I also never participated in Binance Launchpad, Earn, Margin, or Futures. I know the best use of my time is to build a solid platform that services our users.
At Binance, we look for amicable solutions to all problems. We are collaborative with regulators and government agencies all around the world. While we are not perfect, we hold ourselves to a high standard, often higher than what existing regulations require. And above all, we believe in doing the right thing by our users at all times. In this journey towards freedom of money, we do not expect everything to be easy. We do not shy away from challenges.
We thank you for your unwavering support!