Binance responds to scathing CFTC lawsuit

The exchange stated that it wished to collaborate with regulators to develop clear guidelines.

Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, has responded to the Commodity Futures Trading Commission’s scathing lawsuit against his company.

The CFTC launched a barrage of complaints against Binance and Changpeng Zhao on March 27 in a lawsuit accusing him of insider trading and evading KYC (know-your-customer) controls.

In response to a federal regulatory lawsuit filed against Binance that has shook the crypto industry, the company stated that the best way forward is to continue protecting its users while also working with regulators to develop a clear regulatory framework.

“The complaint filed by the CFTC is unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years,”  a Binance spokesperson said in an email to Decrypt.

“Nevertheless, we intend to continue to collaborate with regulators in the U.S. and around the world.”

The Commodity Futures Trading Commission (CFTC) charged Binance, the world’s largest cryptocurrency exchange, with violating trading and derivatives rules on Monday, alleging that Binance has operated a facility for trading digital asset derivatives in the United States since at least July 2019, allowing U.S. residents to trade futures, swaps, and options on cryptocurrencies.

“We have made significant investments over the last two years to ensure that there are no US users active on our platform,” the company said.

“Our compliance team has grown from around 100 people to around 750 core and supporting compliance personnel today.”

Binance also stated that it has implemented a “robust “three lines of defence” approach” to risk and compliance, which includes mandatory KYC, blocking users from the United States by banning U.S. IP addresses and cellular providers, and prohibiting deposits and withdrawals from U.S. banks.

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