Washington, United States — Reports suggest that Binance US, an entity owned by Changpeng Zhao (CZ), has been involved in wash trading activities that artificially inflated its trading volume.
The Wall Street Journal (WSJ) reported that CZ confirmed that $70,000 worth of Bitcoin, traded on Binance US’s launch day, originated from its affiliated entities.
This allegation surfaces merely two months after the Securities and Exchange Commission (SEC) launched a comprehensive lawsuit against Binance.
Among the claims, the lawsuit alleges that Binance utilized Sigma Chain, a company under CZ’s ownership, to manipulate trading volume. Binance has denied these allegations.
Crypto market analysts have highlighted that wash trading is a common occurrence within the industry. Research from the Center for Economic Policy Research (CEPR) indicates that over 70 percent of all reported trading volumes in unregulated exchanges are wash trades.
The same issue also plagues the non-fungible tokens (NFT) industry. Current data suggest over $30 billion of NFT trading on Ethereum is attributed to wash trading. Coinbase, a regulated exchange, was previously penalized by the CFTC for engaging in wash trading activities in 2016.
Binance to list Worldcoin
In another development, Binance announced that it would list Worldcoin, a digital currency linked to an identity project co-founded by AI programmer and entrepreneur Sam Altman. Worldcoin, which uses iris scanning technology to verify user identity, was officially launched on Monday, July 24.
The project’s launch and subsequent listing on several major crypto exchanges, including Binance, Huobi, Bybit, and OKX, caused a surge in Worldcoin’s value. Within the first hour of its listing on Binance, the Worldcoin token (WLD) experienced a price increase of over 60% and reached a market cap of $228 million.
Altman, also known for his contribution to ChatGPT, commented that the rise of AI necessitates a more rigorous method of digital verification, such as Worldcoin’s iris scanning mechanism.
OpenAI chief executive Sam Altman, along with two co-founders, launched Monday the Worldcoin crypto project, saying they aim to grant users a verified digital identity and access to a financial network.
“The Worldcoin Foundation today announced that Worldcoin, a project co-founded by Sam Altman, Alex Blania and Max Novendstern, is now live,” read a statement on Worldcoin’s website.
Worldcoin provides users with a private digital identity — a “World ID” — after they register in person, where an “Orb” imaging device scans their eye’s unique iris pattern to verify they are “a real and unique person,” Worldcoin said.
The founders said verified private digital identities will be crucial to distinguish humans from AI online.
The company also launched Monday its Worldcoin token, a cryptocurrency now transactable on the blockchain in certain locations, to millions “who participated in the beta,” the statement said.
Worldcoin aims to create the “world’s largest identity and financial public network,” according to its website.
“If successful, we believe Worldcoin could drastically increase economic opportunity, scale a reliable solution for distinguishing humans from AI online while preserving privacy, enable global democratic processes, and eventually show a potential path to AI-funded (universal basic income),” Altman and Blania said in a letter posted to Twitter.
The company spent three years developing the project, and 2 million people signed up for a World ID during its beta testing.
Worldcoin is rolling out 1,500 Orbs in locations across the globe, which will enable millions more to register, according to its website.
“Like any really ambitious project, maybe it works out and maybe it doesn’t, but trying stuff like this is how progress happens,” Altman tweeted.
Blania, too, was cautiously optimistic.
“This is the beginning of a long journey. Especially early on, things will not be perfect. But we hope that with fast iteration, Worldcoin can become an empowering technology layer for every human,” he tweeted. (With AFP inputs)