He didn’t address Reuters’ detailed questions.Īfter this article was published, Zhao said in a blog post that he “personally rejected” the 2018 plan to insulate Binance from U.S. Reuters sought comment for this article from Zhao, Binance and Binance.US.īinance Chief Communications Officer Patrick Hillmann said that over the past two years, Binance has “worked with global law enforcement to seize assets of some of the most prolific criminal organizations” in the world. “I am fine with it,” he wrote in an exchange discussing the plan.
Zhao signed off on a plan in 2020 by a Binance executive to backdate a company document to avoid a review of a Binance UK unit under new illicit finance rules. In Britain, too, Binance sought ways around regulatory scrutiny, company messages show. laws and regulations,” said Ross Delston, an independent lawyer, former banking regulator, and expert witness on anti-money laundering issues. raises questions about the degree to which the parent company is willing to comply with U.S. The new insights come as the Justice Department is investigating whether Binance violated the Bank Secrecy Act, which requires crypto exchanges to register with the Treasury Department and comply with anti-money laundering requirements if they conduct “substantial” business in the United States. The department has sought internal records on Binance’s policies and the conduct of Zhao and other top executives. REUTERS/Tom Brenner Department of Justice Building in Washington. The staff left, these people said, because the new chief pushed them to register users so swiftly that they couldn’t conduct proper money laundering checks. boss was appointed by Zhao, according to four people who worked at Binance.US. compliance team quit by mid-2022 after a new U.S. This year, Binance.US’s compliance operation has been in turmoil. An adviser, in a message to Binance executives, described the U.S.
exchange – called Binance.US – was a “fully independent entity.” In reality, Zhao controlled Binance.US, directing its management from abroad, according to regulatory filings from 2020, company messages and interviews with former team members. The new exchange would draw regulators’ attention away from the main platform by serving as a “regulatory inquiry clearing house,” according to the proposal. Executives went on to set the plan in motion, company messages show. authorities by setting up a new American exchange. It shows that in 2018, Zhao approved a plan by lieutenants to “insulate” Binance from scrutiny by U.S. The reporting includes interviews with around 30 former employees, advisers and business partners and a review of thousands of company messages, emails and documents dated between 2017 and early 2022. Now, new reporting by Reuters reveals fresh details about Binance’s strategy for keeping regulators at arm’s length and continuing disarray in its compliance programme. Binance called such requests a “standard process” and said it works with agencies worldwide to address their questions. Justice Department had been pursuing a money laundering investigation into Binance, seeking extensive records on Binance’s policies and the conduct of Zhao and other top executives, Reuters reported on Sept. He told customers in a blog post in January that Binance “embraces regulations” and “has always worked collaboratively with regulators all over the world.”īehind the scenes, however, trouble loomed.įor at least a year before that post, the U.S. But the Chinese-born billionaire, known to staff and fans by his initials, CZ, had that covered. True, global authorities were scrutinising crypto exchanges ever-more closely. In less than five years, the founder and chief executive of Binance had turned his young company into the world's largest crypto exchange, accounting for more than half the trading in the trillion-dollar market. WASHINGTON, DC – As 2022 dawned, Changpeng Zhao was riding high.
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