US senators: Binance dodged regulators and moved criminals' assets and sanctions evaders on purpose

Three senators from the United States have requested details about Binance's regulatory compliance and finances.

The senators claim that the exchange and its affiliated businesses "have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public."

In a letter, Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall demanded that Binance "provide transparency about potentially illegal business practice."

Binance stated in a statement that "a lot of misinformation has been spread about our company” but that “we appreciate the senators’ request," but that "we appreciate the senators' request" and would give material to help them better understand the company.

In the letter written to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder, senators also questioned the validity of the company's business and the security of customer assets.

In a Wednesday letter, the senators reference a series of investigations conducted by Reuters and other media outlets.

The collapse of rival cryptocurrency exchange FTX, whose CEO Sam Bankman-Fried was charged with fraud, "underscored the need for real transparency and accountability in the crypto industry," senators concluded.

Warren and Van Hollen are Senate Banking Committee members.

The letter highlighted Reuters reporting from the previous year that revealed Binance purposely maintained lax anti-money laundering safeguards, processed over $10 billion in payments for criminals and corporations attempting to circumvent U.S. sanctions, and conspired to evade U.S. and international regulators.

The letter also cited a February Reuters report that Binance had hidden access to Binance US's bank account and was able to transfer $400 million to an account handled by Zhao's trading firm.

Binance.US asserts publicly that it is completely separate from the worldwide Binance.com exchange and functions as its "US partner." According to Reuters, Binance launched Binance.US as a de facto subsidiary to divert the attention of U.S. regulators away from Binance.com.

Binance has previously contested Reuters's articles, calling the illicit-funds computations inaccurate and the compliance controls descriptions "outdated." The exchange has stated that it is "driving higher industry standards" and aiming to "further improve our ability to detect illegal crypto activity on our platform."

A spokesperson for Binance.US stated in February that "only Binance.US employees have access" to the company's bank accounts. In a letter first reported by the Wall Street Journal, lawmakers asked Binance and Binance.US to respond to their queries by March 16. The senators are requesting information regarding the balance sheets, U.S.-based users, and anti-money laundering strategies of the companies. They seek clear policies regulating the connection between Binance and Binance.US.

By fLEXI tEAM