Binance and Binance.US, the US branch of the cryptocurrency exchange, which are known to be separate companies, are more intertwined than previously reported in terms of staff, technical teams and finances.
according to sunday reports A review by The Wall Street Journal (WSJ) of internal documents and messages from employees shows that Binance and Binance.US, despite claims that they were completely separate companies, shared employees, finances, and an affiliated Entity that buys and sells cryptocurrencies. ,
The report further claims that Binance has built its US platform as a shield from regulators. The move reportedly came after US authorities signaled a coming crackdown on unregulated offshore crypto players, while a fifth of Binance’s customers are based in the US.
“Afraid of the threat of a lawsuit, Binance plans to neutralize the US authorities,” the report said. “The strategy focused on building a bare-bones US platform, Binance.US, that would license Binance’s technology and brand, but would otherwise appear to be completely independent from Binance.com.”
The report also shared texts between employees of both the companies from 2019 which shows their close partnership. For example, in September 2019, when a Binance employee in Shanghai opened trading for the US platform minutes before its launch, an exchange occurred in a Binance chat group on the messaging app Telegram:
Ninjar [a Binance software developer],Why started trading???? it’s not time yet!!! Who started trading? We had trading timers set? Who started the business?”
Other messages followed, including another urgent one from ninja0r: “Someone started trading early. who did it? Someone started a trade manually at 8:56:09.822. WHO? Why?” Finally, Changpeng Zhao, CEO of Binance, said:There’s a guy here in Shanghai who got operated on by mistake.”
The messages indicated that the Shanghai-based developers initially maintained key software functions on Binance.US. Citing a person familiar with the agreements, the WSJ said the Shanghai developers’ contracts were with Binance, not the US platform.
The report also revealed that Binance staff approached Gary Gensler, former chairman of the Commodity Futures Trading Commission and now SEC chairman, to join the platform as an advisor in 2018. A Binance employee told colleagues at the time that Gensler “could return to a regulatory seat if the Dems win the 2020 election.”
Binance and Binance.US did not immediately respond to requests for comment.
Binance faces increasing scrutiny in the US
Last week, Senators Elizabeth Warren (D-Mass.), Chris Van Hollen (D-MD), and Roger Marshall (R-Kansas) Asked Binance and its US partner Binance.US to provide detailed information about their business operations amid allegations of illegal practices.
In a letter addressed to Brian Schroder, CEO of CZ and Binance.US, the senators said the exchange and its related entities have “purposefully” evaded regulators, facilitating the transfer of assets to criminals and sanctions violators , and has concealed basic financial information from its customers. and the public.
It is worth noting that Binance has been under investigation by the US Department of Justice (DOJ) since 2018. The investigation reportedly focuses on money laundering conspiracy, unlicensed money transfer and violation of criminal sanctions.
Separately, US regulators have cracked down on the Binance-linked BUSD stablecoin. Last month, New York’s Department of Financial Services (DFS) ordered Paxos, a crypto firm that issues Binance’s stablecoin Binance USD (BUSD), to stop mining BUSD tokens.