7 Damning Quotes From the CFTC Binance Lawsuit

Binance’s execs are quoted extensively in the CFTC complaint

article-image

Kutsenko Denis/Shutterstock modified by Blockworks

share

The CFTC has sued Binance and two of its executives, CEO Changpeng Zhao and Samuel Lim, the exchange’s former chief compliance officer. In its complaint, the regulatory agency has included numerous internal communications that it claims show deliberate obfuscation and efforts to sidestep regulation.

Here are some of the most damning quotes from the CFTC complaint.

That pesky OFAC problem

According to the complaint, in 2018 Lim acknowledged that Binance was operating “in the USA” and advised his colleagues that “there is no fking way in hell I am signing off as the cco for the ofac shit.”

The US Office of Foreign Assets Control (OFAC) administers and enforces trade sanctions, and much of the document produced by the CFTC is concerned with Binance’s alleged efforts to avoid such oversight.

Terrorists send small sums

The complaint alleges that in February 2019, after receiving information “regarding HAMAS transactions” on Binance, Lim explained to a colleague that terrorists usually send “small sums” as “large sums constitute money laundering.” Lim’s colleague replied: “can barely buy an AK47 with 600 bucks.”

KYC optional

The CFTC continues, with the ever-more loose-lipped Lim allegedly stating in January 2019 that “Cz doesn’t wanna do us kyc on .com.”

2 BTC limit and US citizens

Regarding the implementation of a 2 bitcoin trading limit for non-verified customers, in 2019, Lim apparently told Zhao that “a huge number” of Binance’s “TIER 1 [meaning customers trading via the two BTC-no KYC loophole] could be US citizens in reality. They have to get smarter and VPN through non-U.S. IP.”

We’re doing things that are not in line with the US

The complaint states that during a management meeting in June of 2019 Zhao stated that “[T]here are a bunch of laws in the US that prevent Americans from having any kind of transaction with any terrorist, and then in order to achieve that, if you serve US or US sanctioned countries there are about 28 sanctioned countries in the US you would need to submit all relevant documents for review [but that is not] very suitable for our company structure to do so. So, we don’t want to do that and it is very simple if you don’t want to do that: you can’t have American users. Honestly it is not reasonable for the US to do this . . . . [U.S. regulators] can’t make a special case for us. We are already doing a lot of things that are obviously not in line with the United States.”

VPNs are not very subtle

The CFTC states that in March 2019, Lim said: “We are actually pretty explicit about [encouraged VPN use] already – even got a fking guide. Hence CZ is ok with blocking even usa.”

Creative onboarding of US users

The ever-obliging Lim allegedly told an employee that, “On the surface we cannot be seen to have US users but in reality we should get them through other creative means.”

Who’s in Chicago?

The complaint notes that a VIP team member contacted Zhao regarding a “Chicago-headquartered trading firm.”

VIP team member: Hi CZ . . . I went through list of affected API clients, it includes a number of large strategic accounts including [a Chicago-headquartered trading firm] who is currently is a top 5 client and 12% of our volume

Zhao: Give them a heads up to ensure they don’t connect from a us Ip. Don’t leave anything in writing. They have non us entities. Let’s also make sure we don’t hit the biggest market makers with that email first. Do you have signal?”

Bonus Quote: If you don’t say US, you might still mean US

The CFTC says that in a November 17, 2020 internal chat, the Director of Operations at Binance made the decision to note that “at present, the keyword US for internal information is also a sensitive word, so you have to use Unknow to mark the country.”


Despite Binance’s long-standing protestations of compliance, the CFTC appears to have significant and detailed information to support its complaint. And that can only be bad news for Binance.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Pineapple begins deploying its $100 million Injective Digital Asset Treasury, staking INJ to earn yield and fund onchain mortgage ambitions

by Blockworks /
article-image

Staking levels in the ether funds will depend on protocol unstaking queue times and anticipated redemption activity, firm says

article-image

ETF inflows, miner strength, and tightening supply drive Bitcoin past its prior peak amid renewed demand for scarce assets

by Blockworks /
article-image

The Guidestar team, led by Alex Nezlobin, will join Uniswap Labs to enhance automated market maker design and smart order routing

by Blockworks /
article-image

Zac Prince spearheads Galaxy’s push into consumer banking with high-yield cash, crypto, and stock trading features

by Blockworks /