The potential existence of a link between Binance and China was brought to light by the Financial Times. The Financial Times said it had certain confidential documents pertaining to the cryptocurrency exchange Binance.
The Financial Times pointed (1) out that these records disprove the previous statements made by a number of executives at Binance, including Changpeng Zhao.
In one of these claims, CZ responded to critics who had said that the government supported Binance. CZ remarked that Binance had ceased all of its activities in China as of the year 2017 and cited this fact.
Zhao also mentioned that only a tiny number of customer support agents for Binance remained in China till the year 2018.
Nonetheless, according to the company’s internal documents cited by the Financial Times, Binance continued to conduct business in China until at least 2019.
Exactly What the Papers Exposed About the Connection Between Binance and China
The confidential documents also disclosed that the highest-ranking officials at Binance gave employees of the company orders to conceal the company’s presence in China.
In a message from 2017, the company advised its customers not to make any of its business addresses the public in any way.
Another document disclosed that employees working in China who were paid by payroll in China were required to attend a tax session at a workplace in China.
An employee of Binance who requested anonymity stated in their statement that the picture being portrayed was incorrect. “Unfortunately, unnamed sources are citing old history (in terms of crypto),” Binance noted in their statement. “This grossly mischaracterizes events.”
CZ is of the belief that the reason for the mistrust is due to the fact that he is Chinese and also hires Chinese.
In addition, Binance assured its consumers that the Chinese government has no access to their data until they make a valid request for it.
Is Binance Trying to Keep Something a Secret?
The action filed by the CFTC comes after Binance.US submitted an application to buy the assets of the defunct company Voyager Digital for a projected purchase of one billion dollars.
The Committee on Foreign Investment in the United States is currently conducting an investigation into the plan to ascertain whether or not the investments will jeopardize the country’s national security.
As a result of the revelation, there are concerns over the level of compliance the exchange has maintained with the regulations.
Although the exchange was officially founded in the Cayman Islands in 2017, the organization does not currently have a defined headquarters.
Binance is being sued by the CFTC because the exchange failed to disclose where its headquarters are located. Because Binance did not register a physical address, the CFTC observed that the company was operating in a “regulatory grey” zone.
Once again, the lawsuit charged Binance with illegally supplying customers in the United States.
In addition, the regulator said that Binance had urged these customers to conceal their locations by utilizing virtual private networks (VPNs).
As a result of these pronouncements, clients are understandably concerned about what the future may hold for the exchange, which has resulted in a net outflow of 900 million dollars.