- The Commodity Futures Trading Commission, (CFTC), filed a surprise lawsuit against Binance.
- The lawsuit has labelled Bitcoin Ether, Binance USD USD, Tether, and Litecoin commodities.
- CFTC also made claims of market manipulations and a failure to comply with regulations.
Binance CEO Changpeng ‘CZ’ Zhao has rejected the allegations made by Commodity Futures Trading Commission (CFTC) against Binance and himself in the March 27 lawsuit.
On March 27, the US CFTC issued a 74-page complaint labelling Bitcoin (BTC), Ethereum (ETH), Binance USD (BUSD), Litecoin (LTC), and Tether (USDT) as commodities and also accused Binance and Changpeng Zhao of market manipulation and lack of compliance.
Binance was also accused by CFTC of not cooperating in the investigation subpoenas and hiding the location of its executive office.
CZ calls CFTC’s claims incomplete recitation of facts
Binance’s CEO published a blog post It is argued that cryptocurrency exchanges:
“Binance.com does not trade for profit or “manipulate” the market under any circumstances. Binance “trades” in a number of situations. All of our revenues come from crypto. They will need to be converted from time to time to cover expenses in crypto or fiat currencies. There are affiliates who provide liquidity for pairs that are less liquid. These affiliates are monitored specifically not to have large profits.”
In the lawsuit, the CFTC has accused Binance of trading on its own platform using 300 “house accounts” without properly disclosing the information to its customers in its Terms of Use. The CFTC says that the exchange has instead kept the information as a “top secret” and even refused to respond to the commission-issued investigative subpoenas looking for information about the said trading activity.
CZ also disclosed that he had two Binance accounts, one for the card and another for crypto holding. In the blog post, he says:
“Personally, I have two accounts at Binance: one for Binance Card, one for my crypto holdings. Binance.com allows me to store and eat my own dog food. I also need to convert crypto from time-to-time to pay for my personal expenses or for the Card.”
