Binance founder Changpeng Zhao, commonly known as “CZ,” has taken a swipe at critics on social media, reposting a criticism of Semafor by Elon Musk from all the way back in November 2022. He also shared news of a cyber hack that his exchange supposedly had thwarted.
Given reports of pending fraud charges against CZ and Binance, CZ’s latest attention-getting public gestures seem highly questionable. And, possibly, a diversionary tactic in the face of mounting fear, uncertainty, and doubt (FUD).
Binance Founder Takes a Swipe at the Media
CZ has reposted an Elon Musk criticism of Semafor from November 23, 2022. In the post, Musk derided the media company for being owned by Sam Bankman-Fried, the former FTX CEO, calling Semafor’s reporting on the disgraced crypto founder a conflict of interest.
A Semafor article on Wednesday had called attention to the possibility that US prosecutors may bring fraud charges against CZ and Binance. Clearly, the purpose of CZ’s tweet was to cast doubt on Semafor’s credibility.
Learn more about one of the most popular chains in crypto: Binance Smart Chain (BSC): A Beginner’s Guide
But since that Musk tweet from last year, Semafor has replaced Bankman-Fried’s funding with new backers. These include Henry Kravis, a founder of the private equity firm KKR, and Jerry Yang, a Yahoo founder.
Sticking to the theme of the day, Zhao also called out reporting by CoinDesk. The article had detailed reports of a possible closure of Binance.US—the American sister company to the main Binance exchange.
“The quality of research, validation, or even logical thinking in this ‘news’ is appalling. If it is a board vote, 1 vote holding out of 3 won’t stop anything. The 2/3 wins. If it is a shareholder vote, Brian S. is a CEO, not a VC or any other type investor. It’s just FUD.”
In a follow-up comment, CZ clarified that there were only three board members.
Binance and CZ Charged With 13 Counts of Securities Violations
Zhao has plenty of reasons to gripe with media organizations. And to question their credibility in public.
The Binance founder is in legal hot water after the Securities and Exchange Commission (SEC) charged him and Binance with 13 counts of breaking securities laws on June 5. Media organizations have reported extensively on these legal woes.
According to the SEC, Zhao and Binance operated unregistered exchanges, broker-dealers, and clearing agencies. The regulator also alleges that both lied about trading controls on the Binance.US platform, thus letting high-value US customers continue trading on Binance.com.
On March 27, 2023, the Commodity Futures Trading Commission (CTFC) filed a civil enforcement action in the US District Court for the Northern District of Illinois. The agency accused Zhao and three entities operating the Binance platform of multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations.
The regulator also accused Samuel Lim, Binance’s former chief compliance officer, of aiding and abetting Binance’s violations.
Wednesday’s reports that Binance would soon be charged with fraud rubbed salt in these fresh wounds. Although, at the time of writing, they are just rumors. Changpeng Zhao and Binance deny all wrongdoing.
CZ Highlights a New Crypto Scam
On Wednesday, the CEO shared news of the “clever” yet unsuccessful scam attempt that occurred the previous day. According to CZ, the scam involved fraudsters generating wallet addresses with the same starting and ending letters.
This is a particularly sneaky tactic, as most people check these characters only when doing a crypto transfer, as CZ noted.
“In fact, many wallets hide the middle part of the address with ‘…’ to make the UI look better,” he added.
Scammers send dust transactions to your wallet address, making it appear in your transaction history. When you later attempt to send funds to the correct address, you might accidentally select the scammer’s address from a previous transaction.
“You might just copy the wrong one,” added Zhao. “This is what happened yesterday, to a very experienced crypto operator.”
However, thankfully for Binance and its customers, the incident ended relatively positively, with the operator noticing the error soon after the transaction. Binance was able to request that the USDT be frozen. CZ’s colleagues will now have to file a police report to reclaim the funds.
If people see CZ as a cyber sleuth and thwarter of scams, perhaps they may view him more kindly if and when prosecutors put him on trial. But that is looking like a very big “if.”
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