Shocking Revelation: Binance Concealed Links to China for Years, Company Documents Reveal

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Sam Cooling

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Sam Cooling

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Sam is a financial journalist with a focus on cryptocurrency market news, based in London. With a Master’s Degree in Development Management from the London School of Economics, Sam’s passion for...

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October 23, 2023 07:19 EDT

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The world’s largest cryptocurrency exchange, Binance, is once again in the limelight amidst allegations of concealing its ties to China.

A recent Financial Times report revealed that Binance had deep and extensive connections to the country even years after officially leaving in the wake of the crypto crackdown in late 2017.

Binance’s CEO, Changpeng Zhao (CZ), and other high-ranking executives have been accused of directing staff to hide the firm’s Chinese operations, including an office in China that remained in use until at least the start of 2020.

Binance – China Links Add Fuel To Fire

These revelations add fuel to the fire, as Binance currently faces a slew of regulatory troubles, including a recent lawsuit by the US CFTC for allegedly providing illegal services to American clients.

The CFTC accused Binance of deliberately withholding information on the location of its executives’ offices and misleadingly asserting that its headquarters were based on CZ’s whereabouts as part of a strategy of regulatory evasion.

Despite Binance’s public statements that it had left China in 2017, internal documents have highlighted how the company concealed the scope and whereabouts of “a small number of customer service agents.”

One message from a Binance employee in late 2019 cautioned others to publicly acknowledge only offices in Malta, Singapore, and Uganda, and refrain from mentioning any other locations, including China.

Binance has dismissed these allegations, stating, “It is unfortunate that anonymous sources are citing ancient history (in crypto terms) and dramatically mischaracterizing events. This is not an accurate picture of Binance’s operations.”

However, the evidence continues to mount against the company.

According to internal documents, China remained a crucial component of Binance’s operations even after the 2017 crackdown.

Employees were informed that their salaries would be disbursed via a bank in Shanghai, and in 2019, Binance asked its Chinese staff to attend a tax session in an office located in the country.

These findings, alongside a recent investigation suggesting Binance employees may be actively assisting Chinese users in evading the country’s rigid crypto regulations, raise serious questions about Binance’s commitment to transparency and regulatory compliance.

This response was sent to Senator Warren, Van Hollen, and Marshall on Mar 16th, 2023 (2 weeks ago).

It has lots of details.https://t.co/Q8wXnnUXDo

— CZ 🔶 BNB (@cz_binance) March 28, 2023

Binance Heading For Regulation Showdown

The ongoing controversies surrounding Binance’s concealed links to China and regulatory evasion strategies are cause for concern for both investors and regulators.

The mounting evidence may lead to further investigations, which could have severe consequences for Binance’s reputation and future operations.

As the crypto world watches with bated breath, Binance and CZ must navigate these tumultuous waters carefully.

To weather this storm, the company may need to make significant changes to its business practices, bolster its compliance infrastructure, and forge partnerships with established financial institutions.

By addressing regulators’ concerns and demonstrating a renewed commitment to transparency and compliance, Binance may yet emerge from this crisis stronger and more resilient than ever.

However, the road ahead for Binance is undeniably fraught with challenges. The company must adapt and evolve to meet the demands of an increasingly complex and regulated industry.

Failure to do so may result in substantial penalties, trading and registration bans, and potential loss of market share.