Binance Inaccurately Explains China Base: Report

Inaccurate description of China base?

Crypto asset (virtual currency) exchange Binance has reportedly been more active in China than publicly disclosed for several years. 29, the Financial Times reported.

According to internal Binance documents, company executives, including CEO Changpong Zhao (CZ), instructed employees to hide the existence of some of the company’s offices in China.

This included the presence of a Chinese office that was in use until the end of 2019 and a Chinese bank that was used to pay the salaries of some employees.

Regarding the China office, until 2019, employee training and events were held at offices in Shanghai. It also hired staff, including data analysts and clearing experts.

New hires based in China were told to install a VPN on their devices to hide their whereabouts, according to Binance employee onboarding documents.

As of 2022, CZ said only “a small number of customer service agents” remained in China by late 2018. Born in China, CZ immigrated to Canada at an early age and holds Canadian citizenship.

If the content of the report is true, it is possible that the part that was actually deployed in China remained longer than what Mr. CZ said. But even in that case, it is unclear whether the motive is to deal with China’s crackdown on cryptocurrencies or to avoid legal compliance.

Binance claims

Binance said in a statement that when China began cracking down on the cryptocurrency industry in 2017, “members of the Shanghai-based founding team left China before the company was incorporated.” said. “Binance has never been incorporated in China,” he continued.

It admits that it has a customer service call center based in China serving customers around the world. “To be clear,” he also stressed that “the Chinese government, like other governments, does not have access to Binance data except when we comply with legitimate law enforcement requests.” .

A Binance spokesperson commented:

CFTC litigation

The report comes in connection with the U.S. Commodity Futures Trading Commission (CFTC) filing a lawsuit against Binance, CZ and other executives on the 27th.

The CFTC took issue with the fact that the global version of Binance provided derivatives trading services in the United States without being registered with the CFTC. They are demanding the return of illegal gains, fines, and a permanent ban on business registration.

It is pointed out that compliance rules were not applied, such as not following basic procedures for countering the financing of terrorism (CFT) and anti-money laundering (AML).

CZ countered that Binance has implemented “state-of-the-art compliance technology” and uses multiple means to block U.S. users.

connection: US CFTC chairman “I’m confident in Binance’s lawsuit”

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