The letter also cited a Reuters report this February that Binance had secret access to Binance.US’s bank account and was able to move $400 million to an account held by a trading firm managed by Zhao. Binance.US publicly maintains that it is entirely independent of the global Binance.com exchange and operates as its “US partner.” However, Reuters has reported that, in fact, Binance created Binance.US as a de facto subsidiary to draw the scrutiny of U.S. regulators away from Binance.com. Binance has previously disputed Reuters’ articles, calling the illicit-fund calculations inaccurate and the descriptions of its compliance controls "outdated." The exchange has said it is "driving higher industry standards" and seeking to "further improve our ability to detect illegal crypto 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 requested Binance and Binance.US provide documents and answers to their questions by March 16. The senators are seeking information about the companies’ balance sheets, U.S.-based users, anti-money laundering policies. They want written policies regarding Binance and Binance.US’s relationship. (Reporting by Angus Berwick; Editing by Anna Driver)
By Angus Berwick and Tom Wilson
March 2 (Reuters) - Three U.S. Senators have asked giant
cryptocurrency exchange Binance and its U.S. partner Binance.US
for information about their regulatory compliance and finances,
citing a series of investigations by Reuters and some other
media reports, according to a letter released on Wednesday.
In the letter, Democrats Elizabeth Warren and Chris Van
Hollen along with Republican Roger Marshall, called on Binance
"to provide transparency about potentially illegal business
practice," adding that the exchange and its related entities
"have purposefully evaded regulators, moved assets to criminals
and sanctions evaders, and hidden basic financial information
from its customers and the public.
In a statement, Binance said that "a lot of misinformation
has been spread about our company" but that "we appreciate the
senators' request" and that it will provide information to help
them better understand the firm.
The senators also questioned the legitimacy of the company's
business and the safety of customers' assets, in the letter
addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian
Shroder.
The collapse of rival crypto exchange FTX, whose founder Sam
Bankman-Fried has been charged with fraud, “underscored 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 articles from last year that found
that Binance intentionally kept weak anti-money laundering
controls, processed over $10 billion in payments for criminals
and companies seeking to evade U.S. sanctions, and plotted to
evade regulators in the United States and elsewhere.
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