Binance has hidden substantial links to China for several years, where contradicting executives have also claimed that the crypto exchange left the country after the clampdown on the industry in late 2017 as per the Financial Times report.
Financial Times has seen all the internal documents and made a report accordingly. Chief Executive Chanpeng Zhao and others who hold senior positions have repeatedly instructed Binance employees to hide their company’s Chinese presence.
It also includes an office in use until the end of 2019, and the Chinese Bank came in use to pay their employee’s salaries.
Quick Take
- Binance has allegedly hidden its links to China for multiple years, according to a report by the Financial Times.
- The report claims that Binance’s top executives, including CEO Changpeng Zhao, instructed employees to conceal the company’s presence in China.
- These allegations have raised concerns about Binance’s compliance with anti-money laundering and know-your-customer regulations and its potential implications for its operations in other jurisdictions.
Some regulators and lawmakers have expressed concerns that Binance may operate in China, despite the country’s ban on cryptocurrency trading. As a result, it may need more to prevent money laundering or other illicit activities.
Additionally, Financial Times have raised concerns that Binance may hide its links to China, which could affect its operations in other jurisdictions.
It is worth noting that Binance has denied any wrongdoing and has stated that it is committed to complying with all applicable laws and regulations. However, the situation is complex and ongoing, and it remains to be seen how it will be resolved.
What Documents Revealed about Binance China Link?
According to internal documents obtained by the Financial Times, Binance’s top executives instructed employees to conceal the company’s presence in China.
For example, one message from 2017 urged users to keep Binance’s office addresses private. Another document shows that employees on payroll in China were ask to attend a tax session in a Chinese office.
In response to the allegations, an unnamed Binance employee disputed the report’s accuracy, stating that anonymous sources referred to old incidents and mischaracterized the events. Additionally, Binance’s CEO, Changpeng Zhao, suggested that the company may face scrutiny because he is Chinese and employs Chinese staff.
Binance has reassured its customers that the Chinese government does not have access to its data except through legitimate requests, and the situation is ongoing.
Is Binance trying to hide something?
The recently leaked internal documents highlight the efforts made by Binance, the world’s largest cryptocurrency exchange, to conceal the location and extent of its operations as regulators investigate crypto-related activities.
According to Binance CEO Changpeng Zhao, most of the company’s staff left China after 2017, when the country cracked down on cryptocurrency, except for a few customer service agents. These revelations have raised concerns about the company’s compliance with regulations and transparency with regulators and users.
US regulators also accused this crypto exchange on Monday of illegally serving American clients. In addition, the Commodity Future Trading Commission has also alleged that Binance deceived people by not revealing the location of executive offices.
In late 2019, the company discussed in a media report that a new office would open in Beijing; we already have offices in Uganda, Singapore, and Malta. However, one message also said they don’t confirm other offices elsewhere, including China.
Binance also said that some sources mischaracterize events and present things miserably. It is not the actual picture of Binance operations.
Even publicly, Zhao has clearly stated that Binance is not a Chinese company. In a blog last year, he said that only a few customer service agents stayed in China. The Binance Chief was born in China but has Canadian Citizenship because he moved to Canada as a child.
The actual team members left China after two months of crackdowns on the crypto industry in China. As a result, the exchange has never been incorporating or registered in China.
Internal Documents Reveal Binance’s Continued Ties to China Despite Zhao’s Claims
Unlike other governments, China has no access to Binance data. However, the internal documents clearly stated how important China was for Binance.
In 2018, the employees were told that the wages would be paid through a bank in Shanghai. A year later, all the employees were told to attend a tax session in an office located in China.
After continuing their operations, a senior employee of Binance said, “No one would wear apparel or accessories with Binance Logo around office locations, as it is strictly prohibited.
Moreover, an office in Shanghai was also use for training sessions. Binance has gone to some serious lengths to disguise its presence through VPNs.
A Binance employee also instructed all the newcomers to use VPNs to access the service of a different location. Therefore, no one can claim that Binance offices still serve in China. However, Binance should have paid more attention to all these things, and they said that they don’t use any network to manipulate their location.
According to a former Cfius official, the United States is currently engaged in a highly significant geopolitical competition. Therefore, any deal that can be link back to China and involves an attempt to influence this new form of finance will raise concerns for Cfius.
Binance has claimed that its US affiliate utilizes its parent company’s technology but functions independently. However, there are connections between the two entities, including through Zhao, who is the ultimate beneficial owner of Binance US.
Final Words
In conclusion, recent allegations and internal documents obtained by the Financial Times suggest that Binance, the world’s largest cryptocurrency exchange, has been hiding its links to China for several years, contradicting its executives’ claims that it had left the country after the crackdown on the industry in late 2017.
The documents reveal that Binance’s top executives instructed employees to conceal the company’s presence in China, including an office in use until the end of 2019 and a Chinese bank used to pay employees’ salaries.
These allegations raise concerns about Binance’s compliance with anti-money laundering and know-your-customer regulations and its potential implications for its operations in other jurisdictions. Binance has denied any wrongdoing, but the situation remains complex and ongoing.
FAQs
1. What are the allegations against Binance?
The Financial Times reported that Binance had hidden its links to China and had instructed its employees to conceal the company’s presence in China. As a result, there are concerns that Binance may not comply with anti-money laundering and know-your-customer regulations, as well as its potential implications for its operations in other jurisdictions.
2. How has Binance responded to the allegations?
Binance has denied any wrongdoing and has stated that it is committed to complying with all applicable laws and regulations. The company has also reassured its customers that the Chinese government can only access its data through legitimate requests.
3. What are the implications of these allegations for Binance’s operations?
The allegations raise concerns about Binance’s compliance with regulations and transparency with regulators and users. It may also impact the company’s ability to operate in certain jurisdictions and its reputation in the cryptocurrency industry.
4. What should customers of Binance do?
Customers of Binance should monitor the situation closely and stay informed about any developments or changes in the company’s operations. They should also take steps to ensure the security of their cryptocurrency holdings, such as using strong passwords and enabling two-factor authentication.
