SEC Details Binance Wash Trading, CZ Seeks To Dismiss CFTC

Binance is back in the spotlight once again as US regulators ramp up pressure on the world’s largest cryptocurrency exchange. The latest accusation from the SEC is that some of the trading on Binance.US was a mirage.

The Securities and Exchange Commission alleged that Binance.US inflated its trading volumes. This was referred to as the “washing trade”.

SEC: Binance Wash Trading Across ‘Dozens of User Accounts’

This is the latest accusation from the federal regulator, according to a July 24 report by Wall Street Journal.

The Securities and Exchange Commission (SEC) sued Binance.US and CEO Changpeng Zhao in June, alleging that the company was controlling the exchange’s inflated trading volumes.

The regulator claims that Binance.US inflated trading volumes “by using dozens of user accounts held by Sigma Chain, a Swiss trading company controlled by Zhao,” according to the report.

A Binance spokesperson said the allegations of laundry trading are “totally baseless.” They added that the charges were “based on a fundamental misunderstanding of the facts and misapplication of the relevant law.”

The Wall Street Journal also cited a report by the academics. It adamantly claims that more than 70% of the trading volume on cryptocurrency exchanges comes from laundered trading. However, they have not yet published the full research nor confirmed the findings.

This practice was banned in the United States for stocks and bonds nearly a century ago. However, there is no such legislation for cryptocurrency exchanges. There is no regulatory framework for them or for the asset class yet.

Binance is seeking to dismiss the CFTC

In related news, Changpeng Zhao plans to request the CFTC’s complaint be dismissed.

The regulator accused the company of violating the Commodity Exchange Act. However, the situation remains that cryptocurrency is not officially classified as a security or a commodity.

According to Reuters July 24 a reportBinance will file its response to the CFTC complaint on July 27.

The CFTC sued Binance in March, alleging that the company “offered and executed commodity derivatives transactions on behalf of US persons” in violation of the laws.

Binance native BNB is down 1% on the day in a drop to $238 at the time of writing. Moreover, the currency has lost about 3% over the past week and is down 22.5% since the regulatory attack in June.


Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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