CZ Instructed Employees To Hide Chinese Presence For Years
- Binance is accused of concealing links to China despite claiming to have left the country in 2017.
- Internal documents reveal that CZ and other senior executives repeatedly directed employees to hide the presence of Chinese offices.
- Binance denies the allegations, stating that it has “never been registered or incorporated in China.”
Binance, the world’s largest cryptocurrency exchange, has been accused of concealing significant links to China for several years, despite CZ claiming to have left the country in 2017.
The Financial Times has obtained internal company documents that reveal the exchange’s senior executives repeatedly directed employees to hide the presence of the Chinese offices, including an office in use until at least the end of 2019 and a Chinese bank that was used to pay some employee salaries. The accusations against Binance come as regulators worldwide increase their scrutiny of crypto-related activity.
Binance CEO Changpeng Zhao, who was born in China but later moved to Canada and has Canadian citizenship, announced in November 2017 that “we no longer publish our office addresses…people in China can directly say that our office is not in China.”
Despite Zhao’s claim that most of Binance’s employees left China after the country intensified its crackdown on crypto, internal documents reveal that the company continued to hire staff well into 2019, including a data analyst and a clearing specialist in Shanghai, two years after Binance claimed to have left China.
The Commodity Futures Trading Commission (CFTC) has sued Binance, alleging that it “intentionally” concealed the location of its executive offices and that statements that its headquarters were wherever Zhao was located reflected “a deliberate approach to attempt to avoid regulation.”
Binance’s US affiliate is also under scrutiny in Washington over its proposed $1 billion purchase of assets belonging to Voyager Digital, a bankrupt crypto lender based in the US. The acquisition is being reviewed by the Committee on Foreign Investment in the United States (Cfius), a government agency that determines if overseas investments present national security risks.
Binance denies the allegations, stating that it has “never been registered or incorporated in China.” The company also says that its US affiliate licenses its parent’s technology but is an operationally independent entity. However, links between the two exist, including with Zhao himself, who is Binance US’s ultimate beneficial owner.
Binance added that the Chinese government, like any other government, has no access to Binance data except where the company is responding to lawful and legitimate law enforcement requests. Nevertheless, the controversy surrounding Binance highlights the challenges that cryptocurrency exchanges face as they navigate the complex regulatory landscape of the industry.
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