Three US senators have asked cryptocurrency giant Binance and its US partner Binance.US about their regulatory compliance and finances, citing a number of investigations by Reuters and some other media outlets, according to a letter released Wednesday.
Must provide transparency on business practices
In the letter, Democrats Elizabeth Warren and Chris Van Hollen, along with Republican Roger Marshall, called on Binance “to provide transparency on potentially illegal trading practices,” adding that the exchange and its related entities “have deliberately evaded the authorities of regulation, transferred assets to criminals and penalty evaders, and withheld basic financial information from its clients and the public.
In a statement, Binance said that “a lot of misinformation has been spread about our company,” but that it “appreciates the request from senators” and will provide information to help them better understand the company.
In the letter addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder, the senators also questioned the legitimacy of the company's business and the safety of clients' assets.
Il collapse of rival exchange FTX, whose founder Sam Bankman-Fried has been accused of fraud, “underlined the need for real transparency and accountability in the crypto industry,” the senators wrote.
Warren and Van Hollen are members of the Senate Banking Committee
The letter cited Reuters reports from last year that Binance allegedly maintained weak anti-money laundering controls, processed over $10 billion in payments to criminals and companies seeking to evade US sanctions, and plotted to evade regulators. in the United States and elsewhere.
The letter also cited a February Reuters report that Binance had covert access to Binance.US's bank account and was able to move $400 million into an account held by a trading firm managed by Zhao.
Binance.US publicly claims that it is completely independent of the global exchange Binance.com and acts as its “US partner”. However, Reuters reported that Binance actually created Binance.US as a de facto subsidiary to divert the attention of US regulators away from Binance.com.
Binance has already disputed the Reuters articles, calling the calculations of illicit funds inaccurate and the descriptions of its compliance checks “outdated”. The exchange said it was “driving at higher industry standards” and looking to “further improve our ability to detect illegal cryptocurrency activity on our platform.” A Binance.US spokeswoman said in February that “only Binance.US employees have access” to its bank accounts.
In the letter, first reported by the Wall Street Journal, the senators ask Binance and Binance.US to provide documents and answers to their questions by March 16.
Senators ask about company financial statements, US-based users and anti-money laundering policies. They also want to know the written policies regarding the relationship between Binance and Binance.US.