Binance, its US partner being questioned for regulatory compliance, finance

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

Democrats Elizabeth Warren and Chris Van Hollen met with Republican Roger Marshall in the letter binance “To provide transparency regarding potentially illegal trading practices,” adding that the exchange and its related entities “purposefully evade regulators, transfer assets to criminals and sanctions violators, and protect their clients and the public.” Hide basic financial information.

Binance said in a statement that “a lot of misinformation has been spread about our company” but that “we appreciate the senators’ request” and that it would like to provide information to help them better understand the firm. Will do

In the letter addressed to Binance CEO Changpeng Zhao, the senators also questioned the legitimacy of the company’s business and the protection of customers’ assets. binance.us CEO Brian Schroder.

Collapse of rival crypto exchange ftxwhose founder Sam Bankman-Fried has been accused of fraud, underscored the need for “real transparency and accountability 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 Binance knowingly kept weak money-laundering controls, siphoning off $10 billion (roughly Rs. 82,400 crores) in payments to criminals and companies trying to evade US sanctions. and conspired to evade regulators. in the United States and elsewhere.

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

Binance.US publicly states that it is completely independent of the global Binance.com exchange and operates as its “US partner”. However, Reuters has reported that, in fact, Binance created Binance.US as a de facto subsidiary to ward off scrutinizing US regulators from Binance.US.

Binance has previously disputed Reuters articles, calling the illicit-funds count inaccurate and details of its compliance controls “outdated”. The exchange has said it is “driving to higher industry standards” and is seeking to “further improve our ability to detect illegal crypto activity on our platform”. A spokeswoman for Binance.US said in February that “only Binance.US employees have access to the bank accounts”.

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

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

© Thomson Reuters 2023