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Crime and Investigations

Binance Reportedly Concealed Ties to China

Binance Reportedly Concealed Ties to China

Binance, the world's largest cryptocurrency exchange, reportedly concealed ties to China despite claiming to have left the country in 2017 following Beijing's regulatory clampdown, according to internal documents cited by the Financial Times.

Accodring to the report, the exchange reportedly directed employees to conceal its presence in China, with a mainland office active until 2019 and a Chinese bank used for payrolls. Binance allegedly instructed its employees to only acknowledge offices in Malta, Singapore, and Uganda and to avoid reference to other locations, including China.

The platform reportedly included instructions in the onboarding documentation for new employees in China to install virtual private networks on their devices to conceal its Chinese presence.

Binance responds to reports

Binance has strongly rejected allegations that it illegally served clients in the U.S. and concealed its ties to China. The exchange spokesperson stated that the business does not operate in the country and has no technology, including servers or data, based there.

The spokesperson also called the anonymous sources’ information “ancient history” and stated that it mischaracterized the company’s operations. The Financial Times could not determine whether the Chinese offices cited in the company’s internal communications were still active.

However, according to a former employee cited by the outlet, many of the exchange’s developers were still in China.

Regulatory challenges facing Binance

The exchange has been under increasing regulatory scrutiny, with the U.S. Commodity Futures Trading Commission (CFTC) suing it over allegations that it illegally served clients in the U.S. This is not the first time Binance has come under fire from regulators, with investigations from the CFTC, the Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), and federal prosecutors.

The regulatory pressure on Binance and other cryptocurrency exchanges is likely to increase, with concerns over their potential use in money laundering, terrorism financing, and other illegal activities.

READ MORE: European Banking Federation’s vision for the Digital Money Ecosystem

Binance’s response to regulatory challenges

Despite the regulatory challenges facing Binance, the exchange’s CEO, Changpeng Zhao, remains optimistic about the future of cryptocurrency.

In a recent blog post, he wrote:

“The crypto industry is still in its early days, and as it grows, so will its regulations. As a company, we are committed to working with regulators to ensure compliance, while also advancing the adoption of crypto worldwide.”

Binance has also made efforts to improve its compliance and security measures, including appointing former U.S. Treasury criminal investigator Greg Monahan as its Global Money Laundering Reporting Officer.

The recent reports about Binance’s alleged ties to China highlight the challenges facing the cryptocurrency industry and the need for greater transparency and compliance measures.

The increasing regulatory scrutiny of Binance and other cryptocurrency exchanges is likely to continue, and these exchanges will need to work closely with regulators to address their concerns.

While cryptocurrency’s future remains uncertain, mainstream companies and institutional investors’ growing acceptance of Bitcoin and other digital assets suggests that they are here to stay.

Andrey Kunev

Reporter at CoinsPress

Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.

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