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The WSJ’s investigation reveals that Binance’s CEO Changpeng Zhao was aware of wash trading at the American branch launch and “directed” it. 
According to a report from the&nbsp;<a href="https://www.wsj.com/articles/some-binance-us-crypto-trading-was-a-mirage-the-sec-alleges-55a6e321" target="_blank" rel="noopener noreferrer nofollow">Wall Street Journal</a>, in the first hour of Binance launching its American platform, BinanceUS, around $70,000 worth of Bitcoin (<a href="https://crypto.news/price/bitcoin/" data-type="URL" data-id="https://crypto.news/price/bitcoin/" rel="noopener noreferrer nofollow">BTC</a>) was exchanged. 
The media accessed the internal communication, where CEO Changpeng Zhao allegedly admitted the volume wasn’t all from external traders. 
<blockquote class="wp-block-quote"> 
 “That was ourself, I think.”&nbsp; <cite>Binance’s CEO Changpeng Zhao</cite> 
</blockquote> 
In addition to that, the WSJ report alleges that the global Binance exchange wash-traded about 46% of its total volume. 
<h2 class="wp-block-heading" id="what-is-wash-trading">What is wash trading</h2> 
This raises a larger question about actual trading volumes versus coin promoters shuffling assets, known as wash trading. 
Wash trading is a deceptive practice in the financial markets where an entity, typically a trader or a group of traders, artificially inflates trading volumes by repeatedly buying and selling an asset to create the illusion of higher market activity. 
Wash trading aims to manipulate market sentiment, attract more traders, and potentially increase the asset’s price. This practice is illegal in regulated financial markets as it distorts supply and demand dynamics and misleads investors. 
In the cryptocurrency market, a trader may engage in wash trading by executing buy and sell orders for the same digital asset at the same price, generating substantial trading activity, even though there is no genuine change in ownership or value of the asset. 
 You might also like: <a href="https://crypto.news/mark-cuban-names-wash-trade-as-2023s-main-crypto-scam/" rel="noopener noreferrer nofollow"> Mark Cuban names wash trade as 2023’s main crypto scam </a> 
<h2 class="wp-block-heading" id="sec-allegedly-accuses-binance-of-wash-trading">SEC allegedly accuses Binance of wash trading</h2> 
Per WSJ, SEC claimed that 70% of trading volume on BinanceUS was inflated by Sigma Chain’s accounts. Sigma Chain, as earlier <a href="https://www.wsj.com/articles/texts-from-crypto-giant-binance-reveal-plan-to-elude-u-s-authorities-3a17ddeb" data-type="URL" data-id="https://www.wsj.com/articles/texts-from-crypto-giant-binance-reveal-plan-to-elude-u-s-authorities-3a17ddeb" target="_blank" rel="noopener noreferrer nofollow">reported</a> by WSJ, is a Swiss trading company allegedly controlled by Zhao. Moreover, SEC alleges that CZ was aware of and directed such operations. 
In response to WSJ’s revelations, a spokesperson for the US arm suggested that BinanceUS and CZ had never participated in or condoned wash trading. 
This allegation holds significant weight, especially considering that this adds up to other issues, such as SEC and CFTC lawsuits. Currently, Binance <a href="https://crypto.news/binance-and-cz-file-motion-to-dismiss-cftcs-lawsuit/" data-type="URL" data-id="https://crypto.news/binance-and-cz-file-motion-to-dismiss-cftcs-lawsuit/" rel="noopener noreferrer nofollow">is seeking</a> to dismiss the CFTC one. 
Moreover, Binance faces a massive wave of layoffs. Changpeng Zhao reportedly&nbsp;<a href="https://crypto.news/binance-reportedly-accepting-voluntary-resignations/" rel="noopener noreferrer nofollow">introduced</a> a voluntary resignation option for employees amid uncertain reasons for the decision. Reports indicate that employees across various departments are being given the choice to opt for voluntary termination. 
 Read more: <a href="https://crypto.news/binance-lays-off-over-1000-employees-amid-regulatory-hurdle/" rel="noopener noreferrer nofollow"> Binance lays off over 1,000 employees amid regulatory hurdle </a> 
<h2 class="wp-block-heading" id="other-issues-with-wash-trading">Other issues with wash trading</h2> 
This is not the first time the wash trading accusations have arisen. Coinbase, a major US crypto exchange, had the same legal troubles with the <a href="https://crypto.news/tag/cftc/" rel="noopener noreferrer nofollow">CFTC</a>. 
The regulator claimed that the trading platform engaged in wash trading for over six weeks in 2016. The dispute was <a href="https://www.cftc.gov/PressRoom/PressReleases/8369-21" target="_blank" rel="noopener noreferrer nofollow">later settled</a> in 2021 with the CFTC ordering Coinbase to pay $6.5 million in fines. 
 Read more: <a href="https://crypto.news/nber-over-70-transactions-on-unregulated-exchanges-are-fake/" rel="noopener noreferrer nofollow"> NBER: over 70% transactions on unregulated exchanges are fake </a>

WSJ: CZ was aware of wash trading at BinanceUS

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