Binance Has Been Witholding Information From Regulators, Claims Reuters
Whilst claiming that it welcomes regulatory oversight, major crypto exchange Binance was acting against those same regulators, Reuters reported today.
Reuters says it conducted “dozens” of interviews with former senior employees of the exchange, as well as advisers and business partners, and that it reviewed numerous documents, including internal company messages and confidential correspondence between Binance and national regulators.
Citing their own investigation, Reuters claims that the crypto exchange was:
Therefore, the report claims that,
“Binance has operated outside rules that govern traditional financial firms and many crypto rivals. An opaque corporate structure has enabled Binance to offer products that many national regulators don’t allow locally registered firms to sell. Binance has repeatedly declined to specify in which jurisdiction its main online exchange is based, complicating regulators’ efforts to oversee its activities. And it has minimized costly client background checks.”
Running away from the tightening regulation in China in 2017, the exchange apparently decided in 2018 to set up base in Malta, stating that it planned to seek a license to operate its exchange from the island. However, CEO Changpeng Zhao “grew nervous about [Malta’s] stringent anti-money laundering protocols and the level of financial disclosure required,” Reuters said, citing “four people with direct knowledge of the licensing discussions” – scrapping the plan in 2019, as well as the promised donations to the country’s cancer patients.
“Yet for several months Binance kept telling its millions of customers that its terms of use were “governed under the laws of Malta,” says the article.
Reuters said that the company replied to their
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