It goes by the name Binance Account Bound (BAB). 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.”īinance.US didn’t return a request seeking comment.The cryptocurrency exchange Binance launched its first-ever soulbound token on the BNB Chain on the 8th of September, 2022. “As a globally regulated exchange, 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. “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. Binance also hired a new chief compliance officer in January: Noah Perlman joined the exchange after a stint at the Winklevoss-founded Gemini Trust. Hillmann said the company is in settlement discussions with US regulators but couldn’t provide a timeline or a potential settlement amount. The letter criticized the exchange’s compliance efforts, saying: “Binance’s business strategy appears to depend, at least in part, on the maintenance of a laughably weak anti-money laundering compliance program.”īinance’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. “With this scheme in place, and in pursuit of profits, Binance has intentionally allowed US-based users to illegally access and trade unregulated products on the main exchange.” Zhao’s assertion that Binance.US is fully independent is eerily similar to claims Sam Bankman-Fried made regarding the distinction between FTX US and FTX – claims that appear to be false, given that FTX US has filed for bankruptcy, its users have lost access to their funds, and its new CEO has declared that it is, in fact, insolvent,” the senators wrote. It likened Binance to the collapsed FTX exchange, which filed for bankruptcy in November after revealing it misused customer funds. The senators allege in the letter that Binance allowed US users to access its global site, which they are supposed to be prohibited from using. 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 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. In February, the issuer of a Binance-branded stablecoin acknowledged that it had received a Wells notice from the SEC. That increasing scrutiny has also extended to Binance partners and counterparties. The senators’ letter cited “investigations into criminal sanctions evasion, money laundering conspiracy, unlicensed money transmission, questions about its financial health, and increased scrutiny over its intentionally ‘opaque corporate structure.’” Over the past several years, it’s faced investigations from US agencies including the Department of Justice, the Internal Revenue Service and the Securities and Exchange Commission. The global entity had secret access to a bank account belonging to the US exchange, according the Reuters report.īinance is the world’s biggest crypto exchange, with nearly 60% market share as of mid-February, according to research firm CryptoCompare. Binance and Binance.US have the same majority owner in Zhao, according to the details laid out in the Texas filing. 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. 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. “ 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.
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