In a report released Friday, Reuters laid out the findings of its investigation into Binance’s regulatory compliance practices, the world’s largest cryptocurrency exchange by trading volume.
The authors suggest the existence of a recurring pattern whereby the CEO of the company, Changpeng Zhao, While proclaiming his openness to government oversight, he ran an organization that routinely denied requests for financial and corporate structure information from regulators and circumvented proper background checks on clients.
The reported findings are based on accounts from former high-level Binance employees and advisers, as well as a review of documents such as internal correspondence and confidential messages between various national regulators and the company. According to the document, several high-ranking employees have repeatedly raised concerns about weak Know Your Customer/Anti-Money Laundering (KYC/AML) rules at the company, but were ignored by the CEO.
In addition, the company allegedly acted against the recommendations of its own compliance department by continuing to add new clients from seven countries considered to be at extreme risk for money laundering.
The general conclusion offered by the authors of the report is that the pattern of behavior described allowed Binance to maintain an ambiguous jurisdictional affiliation and opaque corporate structure while offering financial products that would normally require regulatory approval or licensing in many of its countries of operation.
In response to a Reuters question, the company spokesman said that the report’s conclusions were based on outdated or outright incorrect information. Binance CEO Changpeng Zhao later commented via Twitter that:
FUD. Journalists talking to people who were let go from Binance and partners that didn’t work out trying to smear us. We are focused on anti-money laundering, transparent and welcome regulation. Action speaks louder than words. Thank you for your unwavering support!
— CZ Binance (@cz_binance) January 21, 2022
FUD. Journalists talking to people who got fired from Binance and partners who didn’t work out trying to smear us. We focus on the fight against money laundering, transparency and good regulation. Action speaks louder than words. Thank you for your unwavering support!
As Cointelegraph reported, Despite ongoing investigations into suspicious activity on its platform in various jurisdictions, Binance continues to expand into new markets, with the most recent move linked to a possible deployment to Thailand.
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