{"id":100735,"date":"2020-10-30T00:25:36","date_gmt":"2020-10-29T21:25:36","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/binance-ceo-denies-allegations-that-the-exchanges-us-arm-is-a-regulatory-decoy\/"},"modified":"2020-10-30T00:25:36","modified_gmt":"2020-10-29T21:25:36","slug":"binance-ceo-denies-allegations-that-the-exchanges-us-arm-is-a-regulatory-decoy","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/binance-ceo-denies-allegations-that-the-exchanges-us-arm-is-a-regulatory-decoy\/","title":{"rendered":"# Binance CEO denies allegations that the exchange\u2019s US arm is a regulatory decoy"},"content":{"rendered":"

“# Binance CEO denies allegations that the exchange\u2019s US arm is a regulatory decoy <\/strong>”
\n<\/p>\n

Changpeng Zhao, CEO of Binance, is pushing back hard against allegations that the crypto exchange set up its U.S. arm to circumvent regulations and surreptitiously profit from investors.<\/p>\n

According to an Oct. 29 article from Forbes <\/em>contributor Michael Del Castillo, the news<\/a> outlet claims<\/a> to have obtained a leaked presentation outlining Binance\u2019s plans for operating in the United States. The document states that in 2018 \u2014 prior to the launch of Binance.US \u2014 the crypto exchange intended to set up a \u201cTai Chi entity\u201d in the U.S. to act as a type of regulatory lightning rod protecting its main operations from enforcement.<\/p>\n

\u201cWhile the then-unnamed entity set up operations in the United States to distract regulators with feigned interest in compliance, measures would be put in place to move revenue in the form of licensing fees and more to the parent company, Binance,\u201d stated Castillo. \u201cAll the while, potential customers would be taught how to evade geographic restrictions while technological work-arounds were put in place.\u201d<\/p>\n

In a response made roughly an hour after the article\u2019s publication, Changpeng Zhao, or CZ, disputed<\/a> many of the claims, stating that the source \u2014 the leaked document \u2014 was \u201cnot produced by a Binance employee.\u201d Castillo believed that former employee Harry Zhou created the presentation.<\/p>\n

\u201cBinance has always operated within the boundaries of the law,\u201d stated<\/a> the CEO. \u201cWe do not acknowledge the alleged document.\u201c<\/p>\n

CZ claimed that the fact the firm has opened exchanges in several countries is evidence it is willing to comply with regulatory framework \u201cwith proper licensing and app<\/a>lications\u201d and stated Binance \u201chas very strong collaboration with many notable law enforcement agencies worldwide.\u201d He said Binance\u2019s operations in the U.S. have \u201cvery strong restrictions and operating procedures in place.\u201d<\/p>\n

However, the Forbes<\/em> report described parallels between this Tai Chi plan purportedly conceived in 2018 and the trajectory of Binance.US, which launched in September 2019. The exchange\u00a0currently operates\u00a0in 40 U.S. states.\u00a0<\/p>\n

Castillo stated the document suggested the business entity participate in the U.S. Department of Homeland Security Cornerstone Program for detecting weaknesses in the financial systems to \u201cdistract\u201d agencies including the U.S. Treasury Department\u2019s Financial Crime Enforcement Network, or FinCEN, and Office of Foreign Assets Control, or OFAC, the Securities and Exchange Commission, or SEC, the Commodity Futures Trading Commission, or CFTC, and the New York Department of Financial Services, or NYDFS. According to Forbes,<\/em> Binance\u2019s United States arm did so. <\/p>\n

The ownership structure of Binance.US, operated by BAM Trading Services in San Francisco, is also somethingof a mystery. CEO Catherine Coley has claimed there are no ownership ties to Binance \u2014 CZ himself called<\/a> Binance.US \u201ca standalone marketplace\u201d \u2014 but Castillo reported the leaked document stated BAM would continue to \u201clicense trading and wallet technology<\/a>\u201d from the crypto exchange.<\/p>\n

The presentation also purportedly called for the business entity to use virtual private networks, or VPNs, to obscure the locations of crypto traders and bypass existing regulations. Citizens living in\u00a0ten U.S. states can not legally use Binance.US at the time of publication, yet Binance Academy has<\/a> a beginner\u2019s guide to VPNs on its website. CZ has also\u00a0advocated<\/a> for the technology on Twitter<\/a>.<\/p>\n

Responding to the claims on Twitter, CZ stated<\/a> \u201cAnyone can produce a \u2018strategy document\u2019, but it does not mean Binance follows them.\u201d<\/p>\n<\/div>\n