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CZ responds to reports of Binance investigation: story has no “teeth”

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Shortly after a Bloomberg report on Friday that cryptocurrency alternate Binance was beneath investigation for allowing US residents to place illegal trades, Binance founder and CEO Changpeng Zhao (higher often called CZ) dismissed the reports throughout a stay AMA on Clubhouse, saying that the report had “no teeth.” 

“This is a topic that just came up, literally like a few minutes ago or a hour ago,” mentioned CZ. “So number one, the news article said there was no, I don’t have it in front of me, there was no “misconduct,” I’ve to dig it up. So primary there was no report of misconduct from Binance, so the report form of defeated itself.”

CZ famous that as a enterprise Binance maintains a “no comment” coverage on communications with regulators, which locations the corporate in a troublesome place with regards to rebutting the contents of the report, which cited a single nameless supply.

An investigation doesn’t imply that “they’re trying to charge us, trying to do something with us,” and that the report may merely be a routine communication, he mentioned.

With out citing examples, CZ mentioned that related cases of what he characterised as miscommunications have occurred prior to now, and that the “story doesn’t have any teeth.”

He additionally notably alleged that “self-perceived competitors” may bribe or strain journalists to publish tales heavy on allegations and brief on content material. 

CZ has had a fancy relationship with the media over this final yr. Earlier this month, Binance quietly dropped a defamation lawsuit towards Forbes and two of its journalists.

“We maintain a very collaborative posture with all agencies around the world, not just the US. We have an active dialogue with regulatory agencies,” he added.

Cracks within the geofence

The reports that the CFTC is investigating whether or not or not US customers positioned unlawful trades on the alternate maybe shouldn’t come as a shock, on condition that as not too long ago as November final yr he admitted that US merchants discover “intelligent” methods to circumvent the ban.

This morning, nonetheless, CZ vigorously defended Binance’s KYC/AML insurance policies.

“I can comment publicly that Binance probably has the strongest KYC/AML program in the industry,” he mentioned. “[…] We do very careful, very strict KYC/AML. We also use very intelligent geofencing.”

He added that the corporate usually by chance “mislabels” vacationers to the US, claiming that the requirements are sometimes “too strict.”

Nevertheless, he additionally admitted as soon as extra that US customers usually attempt to circumvent the methods in place, and famous that the standard of their limitations have to “improve.” 

Finally he struck a hopeful tone that trade gamers and regulatory companies can discover widespread floor.

“Right now there’s kind of a gap between the industry players and the regulators. I want to see, hopefully, both sides extend their hand and bridge that gap.” 

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