Yesterday, Binance and CZ were recipients of a lawsuit filed against them by the Commodities and Futures Trading Commission, which contained multiple allegations across different fronts.

However one of the allegations that stood out and is been subjected to wide discussions amongst the community is that CZ and Binance traded on the platform: It was said that entities who have engaged in proprietary trading activity on the platform, were owned by Zhao directly or indirectly, including Sigma Chain AG and Merit Peak Limited, it also followed that approximately 300 separate Binance accounts that have engaged in proprietary trading activity on the Binance trading platform are directly or indirectly owned by CZ.

 In his response to the allegations,

  •  CZ explained that the platform doesn’t trade to manipulate the market or for profit, however, he confirmed that in numerous situations it has carried out some trading activity.
  • He gave an instance, clarifying that the revenue of the company is in crypto and that they would need to occasionally convert to fiat or another cryptocurrency to enable them to cover expenses.
  • The CEO also said that they engage the services of affiliates whose job is to provide liquidity for pairs that are less liquid but mentioned that they are being monitored closely “so as not to have large profits.”
  • In addition to this, he confirmed ownership of two personal accounts at Binance – one is assigned to his crypto holdings and the other to his Binance Card. According to him, this was necessary to help him convert crypto from time to time to cover his expenses.
  • CZ further affirmed that there is a set rule of 90-day no-day-trading for all employees, the implication of that rule is they won’t be allowed to buy a coin within 90 days of the most recent sale or vice-versa.

More details on his response to the allegations can be found here.

Featured Image Source: Binance

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