Three US Senators have asked giant cryptocurrency exchange Binance for information about its regulatory compliance and finances.
The senators ay the exchange and its related entities “have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public.
In a letter, Democrat senators Elizabeth Warren and Chris Van Hollen along with Republican Roger Marshall, called on Binance “to provide transparency about potentially illegal business practice.”
In a statement, Binance said that “a lot of misinformation has been spread about our company” but that “we appreciate the senators’ request” and that it will provide information to help them better understand the firm.
The senators also questioned the legitimacy of the company’s business and the safety of customers’ assets, in the letter addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder.
The senators cite a series of investigations by Reuters and other media, according to a letter released on Wednesday.
The collapse of rival crypto exchange FTX, whose founder Sam Bankman-Fried has been charged with fraud, “underscored the need for real transparency and accountability in the 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 that Binance intentionally kept weak anti-money laundering controls, processed over $10 billion in payments for criminals and companies seeking to evade U.S. sanctions, and plotted to evade regulators in the United States and elsewhere.
The letter also cited a Reuters report this February that Binance had secret access to Binance US’s bank account and was able to move $400 million to an account held by a trading firm managed by Zhao.
Binance.US publicly maintains that it is entirely 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 draw the scrutiny of U.S. regulators away from Binance.com.
Binance has previously disputed Reuters’ articles, calling the illicit-fund calculations inaccurate and the descriptions of its compliance controls “outdated.” The exchange has said it is “driving higher industry standards” and seeking to “further improve our ability to detect illegal crypto activity on our platform.”
A Binance US spokeswoman said in February that “only Binance.US employees have access” to its bank accounts. In the letter, first reported by the Wall Street Journal, the senators requested Binance and Binance.
US provide documents and answers to their questions by March 16. The senators are seeking information about the companies’ balance sheets, U.S.-based users, anti-money laundering policies. They want written policies regarding Binance and Binance US’s relationship.
Share this on:
Follow us on:
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
