Documents obtained by the Financial Times suggest that the world’s largest cryptocurrency exchange, Binance, maintained connections with China, contradicting the company’s previous claims.
According to documents obtained by the Financial Times, the CEO of Binance, Changpeng “CZ” Zhao, and other senior executives may have covered up the cryptocurrency exchanges’ ties to China for years. These revelations coincide with a legal action brought by the Commodity Futures Trading Commission (CFTC) of the United States against Binance, the biggest cryptocurrency exchange on the planet.
Founder and CEO of Binance Changpeng Zhao, commonly known as “CZ,” attends “CZ meets Italy” at Palazzo Brancaccio on May 10, 2022, in Rome, Italy. (Antonio Masiello/Getty Images)
The FT report claims that Binance had close ties to China for several years, maintaining offices in the communist country until the end of 2019, and using a Chinese bank to pay staff. This goes against the company’s earlier claims that it would leave China after the country banned cryptocurrencies in 2017.
“We no longer publish our office addresses … people in China can directly say that our office is not in China,” Zhao reportedly said in a company message group in November 2017. The report also reveals that in 2018, workers were informed that their salaries would be paid by a bank with headquarters in Shanghai. In addition, in 2019 employees employed in China were obligated to go to tax training in a facility located there.
The allegations made in the CFTC lawsuit, which was filed on March 27, are supported by the FT‘s findings, which state that Binance concealed the locations of its executive offices as well as the “identities and locations of the entities operating the trading platform.” The lawsuit also refers to an internal Binance memo in which Zhao claimed that the company’s policy was designed to “keep countries clean [of violations of the law]” by “not landing.com anywhere. This is the main reason .com does not land anywhere.”
Speaking to Cointelegraph about the FT report, a Binance spokesperson said, “We do not operate in China nor do we have any technology, including servers or data, based in China.” They strongly rejected the allegations and added, “To be clear, the Chinese government, like any other government, has no access to Binance data except where we are responding to lawful and legitimate law enforcement requests.”
As for the business’s earlier operations in China, the spokesperson said, “While we did have a customer service call center based in China to service global Mandarin speakers, those employees who wished to remain with the company were offered relocation assistance starting in 2021.”
Binance claims that the anonymous sources cited by the FT are referring to ancient history and “dramatically mischaracterizing events. This is not an accurate picture of Binance’s operations.”
Binance is the biggest cryptocurrency exchange in the world, with daily trading volume exceeding $8.5 billion. The business maintains that it does not conduct business in China and has never been registered or incorporated there. Over 8,000 full-time employees of Binance are currently employed by the company, and they are dispersed throughout Europe, the Americas, the Middle East, Africa, and the Asia-Pacific region.
Breitbart News reported this week on the lawsuit filed by the CFTC:
The lawsuit alleges that despite Binance formally preventing American users from using the exchange, it continued to solicit U.S. customers, as well as assisting them in evading compliance controls.
Binance’s global platform stopped servicing U.S. customers in 2019, and was only useable via VPN services which mask an online user’s country of origin. In the same year, Binance created Binance.US, a platform for American users designed to comply with U.S. regulations.
Read more at the Financial Times here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan