A bipartisan group of U.S. senators has demanded that the world’s largest cryptocurrency exchange, Binance , disclose detailed operating details of its business, accusing Binance of being a “hotbed of illicit financial activity.” Previously, Binance had been investigated by the U.S. Department of Justice for alleged money laundering and evasion of sanctions.
In a letter dated March 2, Senators Elizabeth Warren (D-Massachusetts), Chris Van Hollen (D-Maryland), and Roger Marshallu (R-Kansas) demanded that Binance and its U.S. subsidiary Binance. US provides extensive documentation of a company’s financial, legal compliance and risk management practices.
In a letter to Binance CEO Changpeng Zhao (CZ) and Binance.US CEO Brian Shroder, the three senators said:
In the years since Binance was founded, the company has faced mounting and mixed allegations about the legality of its operations.
In 2018, the second year after the establishment of Binance, the U.S. Department of Justice began criminal investigations into Binance and Changpeng Zhao because of concerns that the exchange violated U.S. money laundering prevention laws and sanctions laws. Ann or the supervisor personally filed a complaint.
A spokesperson for Binance told the media that the company expects authorities to correct its operating record and has responded to questions from Justice Department officials, including explaining its operations and cooperating with regulators. The spokesperson said
Binance.com does not operate in the US and has no US customers, however, we take the Senator’s request seriously and will provide information to help them better understand why we are still the most trusted platform for users around the world.
A spokesperson for Binance.US added: ” We welcome engagement with policymakers and look forward to reviewing the Senator’s request.” He said the company is “confident that it can strengthen operations, including legal compliance measures, and will not trade or Lending clients’ funds.”
In the letter, U.S. senators from both parties mentioned the U.S. Department of Justice’s charges against Binance, while saying the company lacked transparency. Lawmakers also accused Zhao of refusing to reveal the location or entity of the Binance exchange:
Many see it as a blatant attempt to evade the world’s financial regulators, serve users without a license, and violate anti-money laundering laws.
The U.S. Securities and Exchange Commission (SEC) also accused Changpeng Zhao of using Binance.US as a shell company to distract U.S. regulators from illegal activities, including allegedly handling at least 10 billion U.S. dollars, the senators said in their letter. U.S. dollar funds go to criminals and targets of U.S. sanctions. The content of the letter stated:
Regarding Mr. Zhao’s statement that “Binance.US is completely independent”, it is very similar to what Sam Bankman-Fried said about FTX US and FTX. After FTX US went bankrupt, the latter’s statement was obviously false, and its users could not Their funds were tapped, and the CEO who took over was effectively declared insolvent.
The lawmakers made seven demands on Binance, including photocopying the company’s balance sheet back to 2017 by March 16, photocopying internal anti-money laundering regulations, and any written-down notes on Binance’s association with Binance.US Policy.
The collapse of FTX, which affected 1 million investors, the senator said highlighted the need for real transparency and accountability in the cryptocurrency industry. Senators said:
Binance is the world’s largest cryptocurrency exchange by trading volume, with more than 120 million users worldwide, which means it is uniquely positioned to facilitate illicit financial transactions on a very large scale, jeopardizing the deposits of millions of users every day.
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