Following Monday's announcement of a lawsuit by the Commodity Futures Trading Commission (CFTC) against Binance and its CEO Changpeng "CZ" Zhao, the crypto exchange's BNB token tumbled overnight.
BNB token slipped by 5.4% in the last 24 hours—the largest drop of any token in the top 10 by market cap—according to CoinGecko. Over the past 24 hours, Bitcoin has also slipped by 2.8% to $27,157, and Ethereum by 1.1% to $1,746, leaving BNB's large stumble as the outlier.
The leading cryptocurrency exchange by trading volume was accused by the U.S. regulator of having violated trading derivatives rules, according to a lawsuit filed by the CFTC in a Chicago federal court.
“The complaint filed by the CFTC is unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years,” a Binance spokesperson told Decrypt in an email. “Nevertheless, we intend to continue to collaborate with regulators in the U.S. and around the world.”
Zhao has released a blog post in response to the CFTC complaint. In the post, he states that the complaint "appears to contain an incomplete recitation of facts."
CZ defended his company’s KYC (Know-Your-Customer) procedures, claiming that it uses “best-in-class” technology to ensure compliance. He also reaffirmed his company’s commitment to “transparency and cooperation with regulators and law enforcement,” while stating that, "Binance.com does not trade for profit or “manipulate” the market under any circumstances."
The Binance CEO caused some confusion with the phrase, "I eat our own dog food and store my crypto on Binance.com," which refers to the internal use of a company's own products.
CZ later followed up with a tweet linking to an Investopedia article that defines the expression, claiming he didn't know the expression wasn't commonly used globally.
A few people are asking about "eat your own dog food". I didn't know that expression wasn't that common globally. 😂 So, here it is.https://t.co/ezjT83h5XI
Since the CEO’s statement, BNB's price has remained fairly stable, bouncing between $312 and $307.
Binance has also published a letter to U.S. Senators Warren, Van Hollen, and Marshall in response to their recent demand that Binance provides a detailed accounting of their finances and regulatory compliance, expanding on the points raised in today’s blog post.
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