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Binance, its US partner being questioned about regulatory compliance and finances


Three US senators have asked cryptocurrency trading giant Binance and its US partner Binance.US for information about their regulatory compliance and finances, citing a series of investigations by Reuters and some other media reports, according to a letter released Wednesday.

In the letter, Democrats Elizabeth Warren and Chris Van Hollen, along with Republican Roger Marshall, called on Binance to “provide transparency about potentially illegal trading practices,” adding that the exchange and associated entities “knowingly evaded regulators, transferring assets to criminals and sanctions evaders, and basic financial information that is hidden from its clients and the public.

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

The senators also questioned the legality of the company’s business and the safety of clients’ assets, in the letter to Binance CEO Changpeng Zhao and Binance US CEO Brian Schroder.

The collapse of rival cryptocurrency exchange FTX, whose founder Sam Bankman-Fred has been accused of fraud, the senators wrote, “underscored the need for true transparency and accountability in the crypto industry.”

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

The letter cited Reuters articles from last year that found Binance intentionally maintained weak anti-money laundering controls, processed more than $10 billion (nearly Rs. 82,400 crore) in payments to criminals and companies seeking to evade US sanctions, and conspired to evade regulators in United States and other places.

The letter also cited a Reuters report in February that Binance had secret access to a Binance account in the US and managed to transfer $400 million (around Rs. 3,300 crores) to an account owned by a trading company managed by Zhao.

Binance.US publicly asserts that it is completely independent from the global exchange and acts as its “US partner.” However, Reuters has reported that, in fact, Binance created Binance.US as a de facto affiliate to pull the scrutiny of US regulators away from

Binance previously disputed the Reuters article, calling illicit funds accounts inaccurate and describing its compliance controls as “outdated.” The exchange said it “leads higher industry standards” and seeks to “further improve our ability to detect illegal crypto activity on our platform.” A Binance.US spokeswoman said in February that “only US employees of Binance have access” to its bank accounts.

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

Senators seek information about companies’ balance sheets, US-based users, and anti-money laundering policies. They want written policies regarding the Binance and Binance relationship.

© Thomson Reuters 2023

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.