According to the Financial Times (FT), Binance obscured notable links with China in recent years, conflicting with the exchange’s earlier claims that it had left the country in the face of the intensified regulatory crackdown in 2017. Citing internal documents and conversations, Binance allegedly had an office in China until 2019.
Binance Was Hiding its Links to China, the FT Claims
Binance allegedly hid significant links with China over the past few years, despite the crypto exchange saying it exited the country following the government crackdown on the industry in 2017, according to a report by FT, citing internal company documents.
The FT report claims that Binance executives, including the co-founder and CEO Changpeng “CZ” Zhao consistently instructed Binance staff to hide the exchange’s links in China. Binance reportedly had an office in use there until at least the end of 2019, and used a Chinese bank to pay some of the employee salaries, the report states.
“We no longer publish our office addresses?.?.?.?people in China can directly say that our office is not in China.”
– Zhao allegedly said in a company messaging group in November 2017, according to FT.
The alleged internal documents seen by FT highlight Binance’s efforts “to obscure the extent and location of its operations as regulators scrutinize crypto-related activity,” says the report, which contradicts Zhao’s previous claims that the majority of Binance employees left the country in 2017, apart from “a small number of customer service agents.”
The alleged internal documents also showed an internal conversation between Binance employees where they discussed a 2019 report that claimed the company was planning to open an office in Beijing. “Reminder: publicly, we have offices in Malta, Singapore, and Uganda,” one message said, according to the FT report. “Please do not confirm any offices anywhere else, including China.”
Regulatory Pressures Continue to Weigh on Binance
The FT report could deal another blow to Binance, which has been sued by the US Commodity Futures Trading Commission (CFTC) over allegations that the world’s biggest crypto exchange had been illicitly serving US clients. According to the CFTC civil complaint filed on Monday, Binance’s reported trading volume and profits have stemmed from “extensive solicitation of and access to” US users.
CFTC also sued Samuel Lim, former chief compliance officer of Binance, on allegations of aiding and abetting the supposed violations. The regulator’s lawsuit represents the latest dispute between Binance and US regulators amid the broader crackdown on the crypto industry.
Earlier this year, the US Securities and Exchange Commission (SEC) filed a limited objection to Binance.US’s planned $1 billion acquisition of the collapsed crypto lender Voyager Digital. The court later approved the deal despite SEC’s attempts, but US authorities are still trying to block some aspects of the acquisition.
This article originally appeared on The Tokenist
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