Binance and CZ Accused of Scamming: The Latest Problems and Controversies Explained

Jakarta, CNBC Indonesia – Binance and its boss, Changpeng ‘CZ’ Zhao, have just been accused of being scammers. The SEC, the United States (US) exchange authority, accused the platform’s customer funds to be placed in assets with significant risk.

This is not the first time that Binance and Zhao have been in trouble. Since some time ago, there have been many problems involving the two of them, even having a big impact on the crypto market.

Following are some of the problems that ensnare Binance and CZ, summarized by CNBC Indonesia from various sources, Thursday (8/6/2023):

1. Fraud

The SEC recently accused Binance of mixing billions of dollars of customers’ money into its personal coffers. The mode is through a transfer to a separate company. It turns out that the company is controlled by Zhao.

“We suspect that Zhao and the Binance entities are not only aware of its absolute rules, but they also knowingly choose to circumvent them and put their customers and investors at risk,” said Gurbir Grewal, director of the SEC’s law enforcement division, quoted by the Guardian.

Due to this issue, Binance assets around the world are in danger of being frozen. The SEC also asked the court to prohibit transactions related to company assets.

2. Illegal

In March, the US Commodity Futures Trading Commission (CFTC) accused Binance of operating an illegal exchange in the country. Zhao and a company executive were judged to have avoided the rule of law with the aim of commercial interests.

The CFTC said Binance had been in violation of the law since July 2019. The company was said to be offering and executing commodity futures transactions on behalf of US residents.

In fact, Zhao himself is a Chinese-born Canadian citizen.

3. Crime Transactions

Reuters never reported Binance transactions were predominately for criminal acts. Starting from the sale of illegal drugs, investment fraud, and also hacking.

Related transactions were reported at US$2.35 billion (Rp 34.9 trillion). This report was compiled by two blockchain analyst firms examining court crime records, law enforcement statements and blockchain data in the 2017-2021 period.

4. FTX collapse

FTX’s collapse made a splash late last year. The reason is that this has a big impact on the crypto industry.

But there’s actually a Binance name in this matter. At first, Zhao confirmed he would help and acquire FTX, which was experiencing massive withdrawals from customers.

In the end the promise was not kept and Binance walked away from the deal. Zhao himself said he had no other intention of canceling, because FTX’s bankruptcy is not good for anyone.

(npb/npb)