A recent Reuters investigation uncovered new facts about how Binance has been skirting restrictions in the US and the UK. The piece’s writers, Tom Wilson and Angus Berwick blamed the exchange for the chaos in the company’s compliance program. And the owner of the exchange voiced his objection.
Binance was founded five years ago in July 2017 by Changpeng Zhao, called CZ. Binance purportedly expanded to become the world’s largest crypto exchange in 180 days. It has expanded its dominion throughout the years by introducing services in a variety of countries.
According to Reuters, the investigation involves interviews with some 30 former workers, advisers, and business partners, as well as a study of thousands of corporate communications, emails, and documents from 2017 to early 2022.
The exchange investigated strategies to avoid regulatory attention in the United Kingdom, according to business correspondence obtained by Reuters.
Zhao reportedly approved a scheme by a Binance executive in 2020 to backdate a corporate document in order to evade scrutiny of a Binance UK branch under new illicit financing legislation. He allegedly wrote when discussing the plan:
“I am fine with it.”
Furthermore, Zhao supported a scheme by lieutenants in 2018 to insulate the exchange from U.S. regulators by establishing a separate American exchange—Binance US.
Zhao stated that the new US exchange was a fully independent entity, but according to regulatory filings from 2020, corporate messaging, and interviews with former team members, CZ managed Binance.US, controlling its operation from outside.
In response, the exchange released a blog written by CZ. He said that one of the piece’s reporters had produced a series of stories on Binance over the last few months, solely from anonymous sources, and that in the middle of the year, the exchange took the unusual step of sharing their whole email chain with the Reuters reporter.
CZ emphasized Binance’s commitment to compliance in the most recent blog post. Notably, the exchange has hired more than 4,000 additional workers, many of whom are in the compliance, investigations, and security space in the last year alone.
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