US Senator Elizabeth Warren is probing crypto exchange Binance and its American arm Binance.US over the companies’ finances and operations.
In a new open letter addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder, Warren asks the two executives a series of questions, saying that retail investors deserve a “full, unobstructed view of relevant operations of the companies they entrust with their assets.”
Says the letter,
“Your companies’ apparent attempts at evading the enforcement of anti-money laundering laws, securities laws, information reporting requirements, and other financial regulations cast serious doubt on the stability and legitimacy of Binance and its related entities, and on your commitment to your customers.”
The Massachusetts Senator also accuses Binance and Binance.US of not having the necessary separation that they have claimed, and compares the two entities to collapsed crypto exchange FTX and its subsidiary FTX.US.
“Mr. Zhao’s assertion that Binance.US is fully independent is eerily similar to claims Sam Bankman-Fried made regarding the distinction between FTX US and FTX – claims that appear to be false, given that FTX US has filed for bankruptcy, its users have lost access to their funds, and its new CEO has declared that it is, in fact, insolvent.”
Warren lists seven demands from Zhao and Shroder. They are as follows:
“1. Please provide complete copies of all Binance and Binance subsidiary balance sheets from 2017 to the present.
2. Please provide an estimate of the number and percentage of US-based Binance users during every fiscal quarter between 2017 and the present.
3. Reports suggest that Mr. Zhao approved a 2018 plan to create a company, then called the ‘Tai Chi entity,’ that would ‘distract regulators with feigned interest in compliance…’ Please provide any and all documents and communications relating to this plan, including its inception, development, and implementation.
4. Please provide complete copies of all internal anti-money laundering (AML) and countering financing of terrorism (CFT) and know-your-customer (KYC) policies and procedures used by Binance, Binance subsidiaries, and Binance.US, as well as communications relating to AML/CFT policies and procedures.
5. Reuters reported that Mr. Zhao told Binance compliance personnel that he wanted ‘no KYC.’ Has Mr. Zhao, at any time, directed or suggested to Binance and/or Binance.US employees that the company should eliminate or limit know-your-customer checks or otherwise weaken its anti-money laundering compliance program? If so, please provide any and all such communications.
6. Please provide complete copies of all written policies and/or procedures regarding the relationship between Binance and Binance.US. If any such policies and/or procedures were made known to investors, please provide copies of those communications.
7. Please provide a complete list of any and all US-based platforms that have, at any point, utilized Binance.com for trading services, lending services, or any other products or services.”
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