Binance, one of the best-known cryptocurrency exchanges, is accused of evading US regulators, according to a leaked document published by Forbes magazine. Changpeng Zhao, CEO of Binance, points out that these are all false accusations imposed by a third party.
According to report published by Forbes, Binance used the figure of another entity to channel all income from exchange and evade United States regulations on tax and accounting matters, a fact that its CEO, Changpeng Zhao, completely denies.
The accusations arise due to the appearance of a leaked document, which supposedly shows the strategies implemented by the exchange to evade the country's regulators. In the document, Binance is linked to an unknown entity, nicknamed "Tai Chi", which was allegedly used to intentionally deceive US regulators and benefit from the operations of investors in the country. According to this report, the structure of the “Tai Chi” entity allowed Binance to provide its financial services with cryptocurrencies, in several countries around the world, without completely submitting to the regulations imposed in each jurisdiction.
Likewise, the leaked document, which according to Forbes appears to be designed by senior executives of the company, is a set of slides that recount the alleged strategy used by Binance. Faced with the accusations, Zhao affirms that it is an assembly by a third party, since the supposed strategy document could have been designed by anyone, and not necessarily by the entity.
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"Tai Chi", an evasive strategy in the best Chinese style
In its report, Forbes notes that the identity of the person who leaked the document remains hidden for security, but that the document he provided appears to be designed by senior executives at Binance, including Harry Zhou, who is credited with its creation. Zhou is the co-founder of Koi Trading, a San Francisco-based cryptocurrency exchange that is partially owned by Binance.
The document, called "Presentation 2", shows some of the demands that Binance supposedly imposed for the use of its services to American clients, including the implementation of VPNs to hide the locations of investors and traders, and thus evade regulations. and regulations of the United States.
Forbes notes that it attempted to contact Binance founder and CEO Zhao, as well as its chief compliance officer, Samuel Lim, and Binance.US CEO Catherine Coley, but did not receive a response by the time of publication. . However, Zhao made an appearance on the networks through his Twitter account, stating that these are false accusations, since the entity operates legally in the United States and complies with all current regulations. In fact, since Binance began life in this country, the company has experienced potential growth and demand for its services.
Likewise, Zhao pointed out that the document was created by a third party, and that it is not a current or former employee of the company. Furthermore, Zhao noted that the development of a strategy document does not mean that Binance follows it, highlighting that Binance has always operated within the limits of the law, something that is evident in the many international exchanges that this exchange has helped launch. in countries such as the United States, Singapore, the United Kingdom, among others.
Complying with the demands of the authorities
Zhao alleges that Binance.US, which is the subsidiary of the company identified in the document as operating illegally, complies with all the country's regulations and that it operates as a segregated entity from his company Binance. Likewise, Zhao pointed out that Binence works together with security firms such as Elliptic, Ciphertrace, Jumio, among others, in order to avoid any type of activity linked to money laundering, money laundering and terrorist financing.
For its part, Forbes points out that several entities that have allied with Binance or its subsidiaries in the past, such as Coinbase, have broken their union with the company due to certain irregularities, although they do not publicly mention these as reasons for their separations.
“While Coinbase never publicly mentioned Binance.US as the reason for its departure, a Coinbase representative confirmed that an investigation led to its departure from the association.”
According to the statements of that representative, Binance may have carried out commercial operations with American clients before obtaining the corresponding licenses.
A warning for exchanges
Recently the Commodity Futures Trading Commission (CFTC) and the United States Department of Justice (DOJ) accused BitMEX from operating illegally in the country. According to analysts, the actions of the US authorities are a reflection of the strong regulatory measures imposed by the nation, and represent a warning to cryptocurrency and digital asset exchange and custody service companies, which must prepare to comply with current legislation. , even when they are not directly located in the country.
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