Binance, Its US Companion Being Questioned for Regulatory Compliance and Funds

Three US Senators have requested big cryptocurrency change Binance and its US companion Binance.US for details about their regulatory compliance and funds, citing a sequence of investigations by Reuters and another media stories, in keeping with a letter launched on Wednesday.

In the letter, Democrats Elizabeth Warren and Chris Van Hollen together with Republican Roger Marshall, referred to as on Binance “to provide transparency about potentially illegal business practice,” including that the change and its associated entities “have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public.

In a statement, Binance said that “a number of misinformation has been unfold about our firm” but that “we recognize the senators’ request” and that it will provide information to help them better understand the firm.

The senators also questioned the legitimacy of the company’s business and the safety of customers’ assets, in the letter addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder.

The collapse of rival crypto exchange FTX, whose founder Sam Bankman-Fried has been charged with fraud, “underscored the need for real transparency and accountability in the crypto industry,” the senators wrote.

Warren and Van Hollen are members of the Senate Banking Committee.

The letter cited Reuters articles from last year that found that Binance intentionally kept weak anti-money laundering controls, processed over $10 billion (nearly Rs. 82,400 crore) in payments for criminals and companies seeking to evade US sanctions, and plotted to evade regulators in the United States and elsewhere.

The letter also cited a Reuters report this February that Binance had secret access to Binance.US’s bank account and was able to move $400 million (nearly Rs. 3,300 crore)  to an account held by a trading firm managed by Zhao.

Binance.US publicly maintains that it is entirely independent of the global Binance.com exchange and operates as its “US partner.” However, Reuters has reported that, in actual fact, Binance created Binance.US as a de facto subsidiary to attract the scrutiny of US regulators away from Binance.com.

Binance has beforehand disputed Reuters’ articles, calling the illicit-fund calculations inaccurate and the descriptions of its compliance controls “outdated.” The change has mentioned it’s “driving higher industry standards” and in search of to “further improve our ability to detect illegal crypto activity on our platform.” A Binance.US spokeswoman mentioned in February that “solely Binance.US staff have entry” to its bank accounts.

In the letter, first reported by the Wall Street Journal, the senators requested Binance and Binance.US provide documents and answers to their questions by March 16.

The senators are seeking information about the companies’ balance sheets, US-based users, anti-money laundering policies. They want written policies regarding Binance and Binance.US’s relationship.

© Thomson Reuters 2023