Binance is in the crosshairs of a few senators for suspicion of illegal trading practices.
The group of parliamentarians puts pressure on the world’s largest crypto exchange to obtain financial data as part of an investigation for alleged money laundering and sanctions evasion.
Allegations of illegal practices once morest Binance
Since 2018, Binance has been under investigation by the US Department of Justice. In the same vein, the CEOs of Binance and Binance US received a letter from a group of senators in which they were asked for detailed information on its business operations.
parliamentarians suspect irregularities in the finances of the largest cryptocurrency exchange in the world. In the letter sent Wednesday to Changpeng Zhao (CEO Binance) and Brian Shroder (CEO Binance US), the senators recall that the company has been the subject of disturbing accusations since its creation on the legality of its operations.
Zhao’s company never received a complaint from the Ministry of Justice following his indictment. However, suspicions continue to hang over the platform which would have defied American laws.
Binance suspected of a lack of transparency
Among other allegations contained in the senators’ letter, one can note accusations of lack of transparency already raised by the Department of Justice. Senators believe that CZ refuses to disclose the whereregardings of his exchange to dodge financial regulators, violate anti-money laundering laws and at the same time provide unlicensed users.
The content of the letter also mentions a possible use of the US subsidiary as a front company. According to them, Binance is using this company to practice illegal activities by preventing the intervention of US regulators.
They also suspect the crypto company of having allowed processing over $10 billion in payments for criminals and evaders of US law. THE parallel with FTX is also done by senators who recall that it is the same type of operation that led to the bankruptcy of the exchange platform. They added that FTX is insolvent as of this writing and users cannot recover their funds.
Learn more regarding the internal policies of the exchange
Pour shed light on this matter, the senators demanded that Binance provide them with full copies of balance sheets dating back to 2017. They also want copies of internal anti-money laundering policies as well as anything related to the relationship between Binance and its US subsidiary. All these documents must be provided by March 16 at the latest.
This procedure is intended to protect users who may lose their savings. As the largest exchange in the world, Binance can take advantage of its position to facilitate illicit financial transactions.
Members of the US Senate fear a new episode following what happened with FTX. It is obvious that this case has brought out the need for a more transparent and accountable crypto industry.
Binance defends itself once morest accusations of improprieties
To address the issue, a Binance spokesperson, responding to questions from CNBC, certified that the exchange was working to clarify the situation with the judicial authorities. He confirmed that Binance was in contact with law enforcement officials to answer any questions regarding his case.
Binance’s will is toexplain its business operations and establish healthy cooperation with regulators for the smooth running of its activities.
Regarding the senators’ request, Binance’s spokesperson states that the exchange does not operate in the United States nor does it have any US customers. However, he added that the company stood ready to provide all the necessary information to senators in order to help them better understand their activities. Thus, they will be able to understand the reason why Binance remains “the most trusted platform”.
In the same vein, a spokesperson for Binance US confirmed that the company he represents is ready to engage with policy makers to answer all their questions.
Moreover, he adds that the company has confidence in its compliance practices. Above all, she is strict regarding not trading or lending funds to her clients. Because of this, they have confidence in the soundness of their business practices.
