Last year's fallout of several firms in the crypto space has led to increased scrutiny by the U.S. Securities and Exchange Commission (SEC) in the crypto industry. According to a Wall Street Journal report on March 5, the world's largest crypto exchange, Binance, developed a plan in 2019 to avoid any regulatory scrutiny in the United States. The report highlights that a potential lawsuit from U.S. regulators, who had signaled a crackdown on unregulated offshore crypto firms, could have had severe consequences for Binance's business and officers. Binance executives had warned their employees in a private chat in 2019 of the potential risk.
According to internal documents, Binance had planned to create a separate entity in the US called Binance.US that would appear to be independent of Binance.com, but would actually be licensed by it and use its technology and brand. This strategy aimed to protect Binance.com from regulatory scrutiny by US authorities and exclude US users from its platform.
According to WikiBIT research, the Wall Street Journal (WSJ) reported that Binance and Binance.US have been working much more closely than they had previously reported. According to interviews, messages, and documents reviewed by WSJ, these two entities have mixed staff and finances and shared an affiliated entity that bought and sold digital assets.
The report also revealed that Binance developers from China maintained the software code for the digital wallets of Binance.USs users, allowing the global entity of Binance to access US customer data. In response to these findings, a Binance spokesperson stated in an email to Reuters that the company “did not have adequate compliance and controls in place during those early years” but is now “a very different company today when it comes to compliance.”
Binance Tried Hiring Gary Gensler
According to reports, Binance had discussions about hiring SEC chief Gary Gensler prior to his appointment. The talks took place in 2018 and 2019 when Gensler was a professor at MIT. Former executives of Binance's venture arm, Ella Zhang and Harry Zhou, had several meetings with Gensler in October 2018. In a chat message, Binance chief Changpeng Zhao said that Gensler was helpful in sharing licensing strategies, despite declining an advisor role.
Binance had also previously appointed US government officials as advisers to its platform, but it is currently facing increasing regulatory scrutiny. Due to this, Changpeng Zhao is reportedly considering pulling out of the Voyager deal.
Looking for more information about cryptocurrencies？ WikiBIT offers you a one-stop service! Not only can you access numerous hot news topics, but you can also search for relevant trading firms and obtain their information, such as their ratings, user reviews, and whether they are regulated. Additionally, you can also use WikiBIT to keep up with the latest market trends of various digital currencies.
Don't hesitate any longer - download WikiBIT now and experience its features for yourself!
As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!