US Senators Probe Binance on Potentially Illegal Business Practices
Three US senators have decided to question crypto exchange Binance and its US partner for submitting all the necessary documents and answers relating to "potentially illegal business practices." The lawmakers told Binance CEO Changpeng Zhao (CZ), "Your actions have called into question the legitimacy of your business and the safety of your customers’ assets."
US Lawmakers Question Binance and its US Partner on Compliance
US
Senators Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), and Roger Marshall
(R-KS) sent a letter to Binance and its US partner on Wednesday, calling for
the global crypto exchange to "provide transparency about potentially
illegal business practices."
The
letter is addressed to Binance CEO Changpeng Zhao (CZ) and BAM Trading Services
CEO Brian Shroder, seeking documents and answers relating to each crypto
exchange’s "finances, risk management, and regulatory compliance as it
faces investigations into potential crimes," the senators explained.
Binance and its US affiliate, Binance US, are two separate entities. BAM
Trading Services is doing business as Binance US.
Citing
various media reports claiming that Binance is facing multiple investigations
by law enforcement and regulators following the collapse of crypto exchange
FTX, the senators have mentioned:
"Binance
and its related entities have purposefully evaded regulators, moved assets to
criminals and sanction evaders, and hidden basic financial information from its
customers and the public."
"Your
actions have called into question the legitimacy of your business and the
safety of your customers’ assets and raised concerns about the potential impact
of these activities on the stability of the crypto market and the broader
financial system," the senators have said.
The
letter also mentions that Binance hired French auditing firm Mazars to
perform a proof-of-reserves (POR) audit on its bitcoin holdings. However, the
auditing firm subsequently "deleted the webpage containing the
report" and paused its activity relating to
proof-of-reserves audits, as the letter details.
Documents and Answers Requested Before March 16
The
senators have concluded their letter by requesting "documents and answers"
relating to a list of questions before March 16. The documents requested by the
lawmakers include "complete copies of all Binance and subsidiary company
balance sheets from 2017 to the present day" and their internal anti-money
laundering (AML), countering the financing of terrorism (CFT), and
know-your-customer (KYC) policies and procedures.
A
copy of the senators’ letter was sent to Gary Gensler, chairman of the US
Securities and Exchange Commission (SEC); Rostin Behnam, chairman of the
Commodity Futures Trading Commission (CFTC); and Merrick B. Garland, US
Attorney General with the Department of Justice (DOJ).
What
is your take on US senators probing Binance and its US partner for
"potentially illegal business practices"? Please post your comments.
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