Shortly after a Bloomberg report on Friday that the Binance cryptocurrency exchange was being investigated to allow U.S. citizens to conduct illegal business, Binance founder and CEO Changpeng Zhao (better known as CZ) dismissed the reports during returned a live AMA on Clubhouse, saying the report had “no teeth.”
“This is a topic that just came up, literally like a few minutes or an hour ago,” said CZ. “So number one, the news article said there wasn’t, I don’t have it in front of me, there was no ‘wrongdoing’, I have to dig it up. Number one, there has been no report of any wrongdoing by Binance, so the report defeated itself. “
CZ noted that Binance, as a company, maintains a no-comment policy on communication with regulators, which puts the company in a difficult position when it comes to refuting the contents of the report that cites a single anonymous source.
An investigation does not mean that “they are trying to accuse us of doing something to us” and that the report could simply be a routine communication, he said.
Without giving examples, CZ said that similar cases of misunderstanding had occurred in the past and that “the story has no teeth”.
He also claimed in particular that “self-perceived competitors” could bribe or pressure journalists to publish stories that are rich in allegations and short in content.
CZ has had a complex relationship with the media over the past year. Earlier this month, Binance silently dropped a defamation lawsuit against Forbes and two of its journalists.
“We have a very cooperative attitude with all agencies around the world, not just the US. We have an active dialogue with the regulators, ”he added.
Cracks in the geofence
Reports that the CFTC is investigating whether or not US users have placed illegal trades on the stock market should perhaps come as no surprise, as it only admitted last November that US traders are finding “smart” ways to get around the ban bypass.
However, this morning CZ vigorously defended Binance’s KYC / AML guidelines.
“I can comment publicly that Binance probably has the strongest KYC / AML program in the industry,” he said. “[…] We are very careful, very strict KYC / AML. We also use very smart geofencing. ”
He added that the company often inadvertently “mislabels” travelers to the US and claims that the standards are often “too strict”.
However, he reiterated that US users often try to bypass existing systems and noted that the quality of their barriers needs to “improve”.
Ultimately, he adopted a hopeful tone that industry players and regulators can find common ground.
“Right now there is some kind of gap between the players in the industry and the regulators. Hopefully I want to see both sides reach out and fill that void. “
