On Wednesday, a news agency, Semafor, announced that the giant cryptocurrency exchange Binance is under scrutiny by the United States Department of Justice (Doj) for committing fraud.
However, the platform stated that the DoJ is reluctant to call out Binance for the crime because it is concerned that the customers would bear the brunt of the charges, just like when the FTX exchange collapsed, causing many investors to lose their funds.
To avoid the same outcome, the DoJ has decided to settle for a subtle method like a fine or non-prosecution agreement which would hold Binance responsible and punish it for the crime while having little impact on the exchange’s customers, according to the report from Semafor.
Consequently, the news aroused concerns in the market as the price of BTC suddenly declined to #29,000 after the announcement. However, the chief executive officer and founder of Binance exchange, Changpeng Zhao (CZ), rebuffed the news as he referred to it as a random FUD.
According to the report, a few hours after the release of the news by Semafor, CZ had tweeted “4” on his Twitter page, representing FUD, as though in anticipation of the news. And in his defense, the CEO tweeted that the Semafor platform belongs to a former FTX founder currently under DoJ scrutiny.
CZ Debunks FUD With Reference To Musk’s Previous Tweet
Supporting his claims, Changpeng Zhao referred to a tweet posted by the CEO of the Twitter platform, Elon Musk, in November 2022 when the FTX exchange collapsed. In the tweet, Elon Musk revealed that he had second thoughts while processing news emerging from Semafor as FTX funds the firm while it still functions.
According to Musk’s tweet, which CZ shared, the Twitter CEO reported that Semafor’s reports lack journalistic integrity. Therefore, CZ hinted that the news released yesterday by Semafor was FUD prepared and funded by Sam Bankman-Fried, the supposed owner of the firm.
And as such, the founder and CEO of Binance urge the public to ignore the news and move on. Notably, a few hours after he addressed the FUD, the price of Bitcoin surged past $29000 as it currently trades at the$29, 359 price level at the time of publication.
Meanwhile, the giant exchange recently broke the 150 million user baser record despite the challenges from the United States regulatory allegations. According to the report, the exchange recently crossed the 128 million user base hallmark in May. However, between May and July ending, it recorded a massive surge in users as more than 22 million users were added to its fan base.
Commenting on the new development, the founder of Binance, CZ, stated that it was a huge growth and a significant milestone considering that the firm is under scrutiny by the United States Financial regulators. Zhao added that the positive development coincided with the firm’s re-entry into the Japanese crypto market and the approval of its Operational license in Dubai.
Binance Keeps Growing Despite Facing Challenges
In March, the Commodity Futures Trading Commission sued Changpeng Zhao and Binance Exchange for operating illegal services and having a substandard regulatory compliance scheme.
Shortly after the accusation, the Securities and Exchange Commission of the US also charged Binance, CZ, and Binance.US for trespassing the commission’s securities regulations, according to the reports. That was not all, the Department of Justice for the United States also joined the league as it reportedly filed a lawsuit against Binance.
In the case document, DoJ reported some fraudulent activities against the Binance exchange but refrained from taking up the case as it could cause a catastrophic ripple effect in the crypto market, just like the FTX exchange’s collapse did.
Meanwhile, a report also showed that the justice department of France is also probing the giant exchange for alleged money laundering. Furthermore, Binance has reportedly exited the Netherlands market, withdrawn its Australian license application, deregistered entities in the UK and Cyprus, and ordered to halt operation in Belgium.
Despite the barriers and challenges, Binance’s user base keeps growing wider. In addition, CZ stated that he expects his firm to grow more in the next 18 months and has been building more capacities to accommodate new users providing them with top-notch services.
