Binance continues to draw ire from US officials and regulators. On Wednesday, a group of bipartisan senators wrote a letter to its CEO Changpeng Zhao asking him to respond to various accusations, including alleged links between the exchange and its American branch Binance.US as well as a significant lack of global transparency. .
Binance faces serious charges
In light of events surrounding FTX, the former second largest exchange in the world, 3 bipartisan US senators wrote a letter to Changpeng Zhaothe CEO of Binance, saying that the platform with 120 million users was a “hotbed of illegal financial activity”.
Via this document, the senators ask the CEO of the largest exchange in the world to provide details on the functioning of his company, and more particularly concerning its links with Binance.USits American branch.
The 2 entities, presented as totally autonomous and distinct, would in fact maintain a relationship of connivance. To support these remarks, the senators relied on a Reuters publication of February 16, arguing that CZ allegedly transferred $400 million from Binance.US to his own company Merit Peak.
According to this same publication, employees within Binance.US would themselves have had little information about the nature and purpose of these movements of funds.
Senators also accuse Binance of having facilitated the transfer of $10 billion for illegal purposes and to criminals.
“The clear attempts by your companies to evade the application of anti-money laundering laws, securities laws, information reporting requirements and other financial regulations cast serious doubt on the stability and the legitimacy of Binance and its related entities, but also on your commitment to your customers. »
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A parallel drawn between Binance and FTX
In addition, the senators did not fail to establish a link between the alleged connections of Binance and its American subsidiary with those formerly existing from FTX and FTX.USlong concealed:
“Mr. Zhao’s assertion that Binance.US is completely independent bears an uncanny resemblance to Sam Bankman-Fried’s assertions regarding the distinction between FTX.US and FTX – assertions that seem false, given that FTX.US has filed for bankruptcy. , that its users lost access to their funds, and that its new CEO said it was, in fact, insolvent. »
They also accuse the CEO of Binance of having allowed US residents to use the classic platform and not the one regulated in the United States, based on particular legislation:
“With this scheme in place, and in pursuit of profit, Binance intentionally allowed US-based users to illegally access and trade unregulated products on the main exchange. [Binance, NDLR]. »
Finally, according to the document, the senators argue that contrary to what Changpeng Zhao claims, that is to say that Binance would be a completely transparent cryptocurrency exchange, the latter would in fact be “a black box”which would not publicly reveal a lot of crucial information such as the weight of BNB in its financial reserves (like the FTT token for FTX).
However, a Binance spokesperson replied to our colleagues at CoinDesk that the senators’ letter was filled with false information and that the exchange teams were ” can’t wait to get the facts straight “.
👉 To dig deeper – Binance suspected of not sufficiently collateralizing the B-USDC stablecoin
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Source: Wall Street Journal
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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