March 2 (Reuters) – A trio of U.S. Senators has sent a letter to the operators of leading cryptocurrency exchange Binance and its U.S. counterpart Binance.US seeking answers related to their compliance with regulations and financial information following a number of investigations by Reuters and other media outlets.
Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall have asked Binance to be transparent about any potentially illegal business practices, highlighting that the firm has reportedly been evading regulations, providing financial support to criminals, and hiding vital financial data from customers and the public.
Binance released a statement indicating 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 letter was addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder and questioned the legitimacy of the company’s operations and the security of customers’ assets.
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The request from the Senate Banking Committee members comes on the heels of the scandal involving rival crypto exchange FTX, which has seen its founder Sam Bankman-Fried charged with fraud, spurring the trio to call for greater transparency and accountability in the cryptocurrency industry.
The letter mentioned Reuters articles that uncovered Binance’s weak anti-money laundering controls, as well as the processing of over $10 billion in transactions for criminals and allowing users to trade crypto assets even after U.S. regulators had warned against doing so.
Two US Senators have sent a letter to the cryptocurrency exchange Binance and its US partner, Binance.US, to question the companies’ compliance with US regulations.
The senators mentioned a Reuters report from February that Binance had access to Binance.US’s bank account and had moved $400 million to an account held by a trading firm managed by the exchange’s CEO, Changpeng Zhao.
Binance.US has publicly declared that it is a separate entity from Binance.com and works as its ‘US partner’, however Reuters has stated that Binance created Binance.US as a sort of subsidiary to draw the attention away from Binance.com.
The exchange has previously disputed Reuters’ articles, calling the illicit-fund calculations inaccurate and the descriptions of its compliance controls ‘outdated’. In a statement, it said that it is working to ‘improve its ability to detect illegal crypto activity on its platform’ and that ‘only Binance.US employees have access’ to its bank accounts.
The senators requested documents and answers to their questions regarding the companies’ balance sheets, U.S.-based users, and anti-money laundering policies by March 16. They also want written policies regarding the relationship between Binance and Binance.US.
Award-winning investigative reporter, Angus Berwick, commented on the story, pointing out that the letter raises questions on the cryptocurrency exchange’s compliance with U.S. regulations, as well as its potential involvement in payments for criminals and companies seeking to evade U.S. sanctions. Berwick was previously a correspondent in Spain and Venezuela, where he reported on the Maduro government’s efforts to retain power.
