The chief of the world’s biggest crypto exchange Binance has hit back at a move from US regulators to sue him night after, branding its civil complaint as an “incomplete recitation of facts”.
The CFTC yesterday accused the controversial Binance chief Changpeng Zhao, known as ‘CZ’, and operations chief Samuel Lim, of multiple breaches of the commodity exchange act, including failing to properly register with the watchdog.
Among the allegations from US regulators were claims the firm helped its customers skirt its own internal compliance controls and failed to implement “basic compliance procedures designed to prevent and detect terrorist financing and money laundering customers”.
CZ said in a statement last night that the complaint “appears to contain an incomplete recitation of facts”, however, and said the firm does “not agree with the characterization of many of the issues alleged in the complaint”.
Binance had “developed best-in-class technology to ensure compliance” and had the “highest standards in know-your-customer and anti-money laundering” tools on offer,he claimed, as well as holding “the highest number of licenses/registrations globally”.
The move from US regulators last night marks a significant ramping up of the regulatory crackdown on crypto firms and has the potential to upend the US operations of the world’s biggest crypto exchange.
The CFTC said it was considering seeking financial penalties and even permanent trading and registration bans as potential punishments for the alleged breaches.
CFTC chair Rostin Behnam said the move “demonstrates that there is no location, or claimed lack of location, that will prevent the CFTC from protecting American investors”.
“I have been clear that the CFTC will continue to use all of its authority to find and stop misconduct in the volatile and risky digital asset market,” he added.
It comes amid a wider global squeeze on crypto companies, as watchdogs look to wrestle them under the more traditional regulatory remit following the collapse of FTX last year.
