An explosive revelation released by The Wall Street Journal claims that Binance and Binance US are more intertwined than previously thought.
of report Based on Telegram chats reviewed by the WSJ between 2018 and 2020, plus supplemental interviews conducted by the WSJ with anonymous Binance/US staff.
Complexity of Binance and Binance.US
A WSJ study finds that the two cryptocurrency exchange platforms, Binance and Binance.US, are integrated at a much deeper level than is publicly available, with Chinese developer Binance.US. It is reported that it maintains software code to support US users. It could allow Binance access to sensitive US customer data.
Binance.US’s attempt to neutralize US authorities by launching Binance.US was led by fears of a crackdown on unregulated offshore cryptocurrency players, with the WSJ reporting that Binance.US led to the decision to create, the WSJ report claims. The WSJ added that it is completely independent.
The close relationship between Binance and Binance.US was manifested in September 2019 when Binance staff in Shanghai began trading minutes before the launch of the US platform. :
Ninja0r [a Binance software developer]: WHY THE TRADING STARTED???? ! ! Who started trading? Have you set a trading timer? Who started trading?
Other messages followed, including another urgent message from Ninj0r. Someone started trading early. who did it Someone manually opened a trade at 8:56:09.822. WHO? why?
Finally, the company’s founder and CEO responded.
Changpeng Zhao: Man here in Shanghai, operation error.
Binance Interested in Hiring Gary Gensler as Advisor
The WSJ reports that Binance proposed SEC Chairman Gary Gensler as an adviser, but the proposal was rejected. However, Gensler shared some “licensing strategies” with former Binance Labs head Ella Zhang and his Binance employee Harry Zhou.
Driving Regulatory PR for Another US Entity by Harry Zhou
According to a presentation reviewed by the WSJ, in late 2018, Harry Zhou, who worked at a Binance-funded bitcoin trading firm, told Binance executives that he had made a deal with the United States that led to inquiries from U.S. regulators and enforcement agencies. I suggested setting up a business to be based on. , thus protecting Binance from their scrutiny.
The presentation includes a section on “Regulatory Engagement Plans” in which Binance launches “major PR efforts to exceed SEC expectations and demonstrate U.S. operations willingness to serve as industry resource for the SEC.” I’m proposing.
According to the WSJ, Zhou founded the Delaware company BAM Trading Services Inc. in February 2019 to become the operator of Binance.US. The former CFO of Binance announced the formation of the company in his Telegram chat, along with his two other companies called BAM Management US Holdings Inc. and BAM Technology Services Inc.
BAM trading and VPN
In June 2019, Binance announced the creation of Binance.US in partnership with BAM Trading, the company that licenses Binance’s brand and technology. Binance.US has been registered as a money service business with the US Department of Treasury’s Financial Crimes Enforcement Network. However, according to documents seen by the WSJ, Binance reveals that founder and CEO Zhao manages his BAM company through multiple entities set up in the Cayman Islands and the British Virgin Islands. not.
Despite announcing that it would stop accepting US customers on its global platform, Binance officials discussed how to keep them. It said that over 18% of page views are from users in the United States. Samuel Lim, who was Binance’s head of compliance, suggested ways to keep the largest U.S. client, including encouraging them to use a VPN to appear to be in another country. We also talked about whether US customers have offshore entities that they can use to access Binance, according to documents seen by .
Risks for Binance and its CEO Changpeng Zhao
If true, the Telegram leak could hurt both CZ and Binance.
Suppose a US regulator determines that Binance controls a US company. In that case, they could claim powers to crack down on Binance’s entire business, exposing the company’s finances to closer scrutiny and risking prosecution.
The Securities and Exchange Commission and the Department of Justice have been investigating the relationship between Binance.US and Binance since at least 2020.
WSJMore Added The SEC is reportedly investigating certain ties between Binance.US and two trading houses with close ties to Zhao: Merit Peak Ltd. and Sigma Chain AG.
On March 3, a bipartisan group of senators asked Binance to answer a series of questions, alleging that Binance had “hidden basic financial information from its customers and the public.”
Reply from Binance and Binance.US
Binance executives and employees declined to comment. The WSJ added that a Binance spokesperson asked Lim or Zhao for comment, but neither Harry Zhou nor Wei Zhou.
On Sunday night, CZ called on its 8.2 million followers to ignore FUD, attacks and fake news.
