The largest cryptocurrency exchange on the planet, Binance, has responded to surfacing US Securities and Exchange Commission (SEC) allegations of wash trading. Indeed, the exchange has said that the allegations are false, and ultimately due to a misunderstanding.
In early June, the SEC sued the cryptocurrency exchange for a host of different securities law violations. Moreover, it claimed that wash trading was afoot for the exchange, with certain accusations against CEO Changpeng Zaho following its lawsuit. Now, the exchange has responded.
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Binance Answeres SEC Wash Trading Allegations
Binance has long been one of the most popular cryptocurrency exchanges on the planet. Yet, this summer saw the US regulatory agency take aim at its operations. Subsequently, it initiated a notable lawsuit accusing the exchange of various nefarious actions. Including wash trading accusations.
Now, Binance has issued a response to the SEC’s Wash trading accusations. Specifically, Binance.US has refuted the claims made by the agency. In a statement from a spokeswoman, Bitcoinist reported its vehement denial of the wash trading activity.
“We strongly believe that the SEC allegations regarding wash trading are entirely unfounded, and based on a fundamental misunderstanding of the facts and a misapplication of the relevant law,” the exchange stated.
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Alternatively, the response was issued to resurfaced allegations in a recent Wall Street Journal report. Specifically, it noted $70,000 in BTC was traded within the first hour of Binance’s operations in 2019. Additionally, the report referenced internal messages from the CEO claiming that the trades were from the exchange.
Wash trading is the process of one entity selling and buying one particular asset in order to manipulate the market. The practice can increase trading volume and mask the actual demand for the product. Thus, making it seem like a more beneficial investment than it actually is.