Regulatory troubles for Binance is not new. But the latest string of accusations come from an anonymous Twitter poster who claims to be the cryptocurrency exchange’s former big data engineer.
What is the story all about?
It all started after the aforementioned Twitter under the pseudonym “RealFulltimeApe” alleged that Binance is engaged in counter trading and liquidating its users. The user also went on to claim “multiple audio and video files inside the office in which management is CLEARLY talking about “quickly” liquidating the overleveraged “longs and shorts” before allowing price to continue up/down, in order to increase the companies’ insurance fund & profits.”
The alleged employee of Binance also claimed to have been working on projects to develop “New Methods” to increase the companies’ efficiency with regards to manipulation of price action to liquidate overleveraged positions.
So far, “RealFulltimeApe” has not disclosed any proof to back those claims yet.
Binance does not appear to be backing down either. In a clarification post, the cryptocurrency exchange implied that it might take legal action while stating that it welcomes responsible whistle-blowing that protects the trust of the cryptocurrency community.
The CZ-led platform tweeted,
“Upon learning about allegations of market manipulation made against us, we want to make our position regarding this critical subject matter clear. Binance has never traded against our users nor manipulated the market, and we never will.”
It also went on to add that,
“Binance places utmost importance on client experience and trading integrity. As our industry strengthens relations with regulators, we expect fewer FUD-peddlers and individuals with malicious intent, including the impersonation of Binance employees.”
Binance wants to keep options open amid increasing regulatory woes
Last year, Binance had sued Forbes Media LLC for defamation over a story that purported to disclose regulatory evasion tactics used by the platform. The suit claimed that Forbes and two writers harmed Binance by publishing a story that, according to the platform, “contained numerous false, misleading and defamatory statements.” Three months later, however, the suit was dismissed by the plaintiff for an unknown reason.
2021 has not been a good year for Binance as the global cryptocurrency exchange’s struggle to keep pace with regulation continued to amplify. Over the past few years, Binance had grown remarkably across the world. However, the regulators are now starting to crack the whip. To this, the exchange’s CEO Changpeng “CZ” Zhao had earlier said that he’s willing to step down from his role and was also “very open” to find a replacement CEO with more regulatory experience.
However, CZ had also insisted that there are no immediate plans, but the company wants to “keeping options open.”
When they mis-quote you… another thread on CEOs.
There are no immediate plans to replace me as CEO.
I/we would very much like to hire a strong compliance background CEO to show our commitment to compliance as this is the top priority of the organization.
— CZ 🔶 Binance (@cz_binance) July 27, 2021