Kostyantyn Kryvopust: Binance hid ties with China for years, company documents reveal


The world’s largest cryptocurrency exchange, Binance, is back in the spotlight after being accused of hiding its ties to China.

Recent report The Financial Times revealed that Binance had deep and wide ties to the country even years after its official exit following the cryptocurrency crackdown in late 2017.

Binance CEO Changpeng Zhao (CZ) and other senior executives have been accused of managing staff to hide the company’s China operations, including a China office that was in use until at least early 2020.

Binance – Chinese links add fuel to the fire

These revelations add fuel to the fire as Binance is currently facing a number of regulatory challenges, including a recent lawsuit by the US CFTC for allegedly providing illegal services to US customers.

The CFTC accused Binance of intentionally concealing the location of its executives’ offices and misleadingly claiming that its headquarters were based in CZ as part of a strategy to evade regulatory requirements.

Despite Binance’s public claims that it had left China in 2017, internal documents highlight how the company concealed the scale and location of a “small number of customer service agents”.

One message from a Binance employee in late 2019 warned others to publicly acknowledge having offices only in Malta, Singapore and Uganda, and to refrain from mentioning any other locations, including China.

Binance dismissed the allegations, saying, “Unfortunately, anonymous sources refer to ancient history (in cryptocurrency terms) and grossly mischaracterize events. This is not an accurate representation of Binance’s operations.”

However, the evidence against the company continues to accumulate.

According to internal documents, China remained a key component of Binance’s operations even after the crackdown in 2017.

Employees were told that their salaries would be paid through a bank in Shanghai, and in 2019 Binance asked its Chinese employees to attend a tax session at an office located in the country.

These findings, along with a recent investigation suggesting that Binance employees may be actively helping Chinese users evade the country’s tough crypto regulators, raise serious questions about Binance’s commitment to transparency and regulatory compliance.

Binance is about to reveal the rules

The ongoing controversies surrounding Binance’s hidden ties to China and regulatory evasion strategy are a source of concern for both investors and regulators.

Increasing evidence could lead to further investigations, which could have serious consequences for Binance’s reputation and future operations.

With the crypto world watching with bated breath, Binance and CZ must navigate these turbulent waters carefully.

To weather this storm, companies may need to make significant changes to their business practices, strengthen their compliance infrastructure and establish partnerships with recognized financial institutions.

By addressing regulatory concerns and demonstrating a renewed commitment to transparency and compliance, Binance can emerge from this crisis stronger and more resilient than ever.

However, the road ahead for Binance is undoubtedly fraught with challenges. A company must adapt and evolve to meet the demands of an increasingly complex and regulated industry.

Failure to do so can result in significant fines, bans from trading and registration, and potential loss of market share.

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