BlocksInform
US Senators representing both Democrats and Republicans are demanding that Binance and Binance.US provide a detailed accounting of their finances and efforts to maintain regulatory compliance, according to a letter signed by Senators Elizabeth Warren, Chris Van Hollen and Roger Marshall
“[What] little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity that has facilitated over $10 billion in payments to criminals and sanctions evaders,” the senators wrote in the letter, which was dated March 1.
The letter, addressed to Binance.US President Brian Shroder and Binance Chief Executive Officer Changpeng “CZ” Zhao, cited recent Reuters reporting that cast doubt on the extent to which the two entities were really independent of each other. This line of questioning echoes a recent court filing from Texas officials related to the proposed Binance.US acquisition of the bankrupt crypto broker Voyager Digital. Binance and Binance.We have the same controlling owner in zhao, as detailed in the Texas depot. The global entity had secret access to a bank account belonging to the US exchange, according the Reuters report.
- Read more: Texas Objection to Binance.US-Voyager Deal Cites Link to Binance
Binance is the largest crypto exchange in the world, with close to 60% market share in mid-February, according to research company CryptoCompare. In recent years, it has been the subject of investigations by organizations such as the Department of Justice, the Internal Revenue Service and the Commission des valeurs mobilieres et des bourses. The senators' letter quotes "investigations into the evasion of criminal sanctions, the conspiracy to launder money, the transfer of money without a licence, questions about his financial health and increased monitoring of his "opaque organizational structure."
This increased control also extended to the partners and counterparties of Binance. In February, the issuer of a binary mark plate acknowledged that it had received a notification of the dry well. The company, Paxos, had also been directed by the New York State Department of Financial Services to stop any further issuance of the BUSD stablecoin, which was at the time the third-largest in the market by circulation. Earlier this year, investigators identified Binance as a counterparty to Bitzlato, a digital-asset platform accused of processing millions of dollars in illegal funds
The letter states that Binance has allowed American users to access its global site, which is supposed to be off-limits. He compared Binance to the collapsed FTX swap, which filed for bankruptcy in November after revealing that it misappropriated funds from customers.
"M. Zhao says Binance."The total independence of the United States bears a striking resemblance to Sam Bankman-Fried's assertions about the distinction between FTX US and FTX – statements that seem false, considering that the US FTX has declared bankruptcy, its users are no longer able to access their funds, and his new president said so, in fact, '' senators wrote. "With this system in place, and in pursuit of profits, Binance has intentionally enabled users based in the United States to illegally access and trade unregulated products on the main exchange."
The letter was critical of the stock exchange's efforts to comply, saying: "Binance's business strategy seems to depend, at least in part, on maintaining a ridiculously weak AML program."
Binance’s Chief Strategy Officer Patrick Hillmann told Bloomberg in a recent interview that the exchange had compliance “gaps” in the past, but has since addressed and closed them. Mr. Hillmann said that the company is in settlement discussions with us, the regulators, but that they could not provide a timeframe or an amount for eventual settlement. Binance also hired a new chief compliance officer in January: Noah Perlman joined the exchange after a stint at the Winklevoss-founded Gemini Trust
“Unfortunately, a lot of misinformation has been spread about our company and we look forward to correcting the record,” Binance said in a statement to Bloomberg. "as an internationally regulated stock market, we receive queries from officials in jurisdictions in which we operate on a regular basis and we always respond in an attempt to both explain our business operations and cooperate with our regulators. Binance.com does not operate in the US, nor do we have US-based customers, however we appreciate the senators’ request and will provide information to help them better understand why we remain the most trusted platform with users across the globe.”
Binance.Binance.com cannot work in the United States, and there are no customers in the United States, however, we welcome the request from senators and will provide information to help them better understand why we remain the most reliable platform for users around the world." Bi-timing.
