Binance may have set up a money laundering front on its platform due to lax regulatory compliance.

According to the report, Binance does not strictly manage the process of verifying customer identities, withholding information from regulators and acting against the recommendations of the company’s legal department.

Is Binance compliant with the regulations?

This new accusation comes as the exchange steps up efforts to brand itself as a regulation-friendly platform.

The world’s largest stock exchange by trading volume has been the focus of several official raids over the past year. However, it remains committed to its desire to work with regulators and meet compliance requirements.

Reuters’ investigation revealed that while Binance has repeatedly spoken publicly about regulatory compliance, its privacy practices have not been verified.

According to the report, CEO Changpeng Zhao’s public statements that he welcomes regulatory scrutiny are simply a hoax. It turned out that the exchange had not fully cooperated with regulators.

Reuters notes that Binance’s claim to be regulated under Maltese law is misleading. Although the exchange sought permission from the Maltese authorities and proposed a move, it was ultimately unsuccessful.

Sources close to the matter claimed that the exchange pulled out due to the island nation’s strict anti-money laundering regulations.

The investigation also found that some of the company’s top executives had raised concerns about the level of compliance. But the CZ-run exchange has repeatedly acted against these recommendations.

By going through an unknown company, the company has operated outlaws. Additionally, the company has refused to disclose its powers, making it difficult for regulators to oversee the company’s operations.

Notably, regulators in countries like South Africa, the UK, Singapore, and others have warned consumers against using the platform.

Information for the report was gathered through interviews with former executives and top employees, and by reviewing various official documents.

CZ responds to Reuters

Changpeng Zhao responded to the report, insisting it was just FUD. A tweet from the crypto billionaire said:

“Journalists talk to people who have left Binance and unsuccessful partners and try to smear us. We focus on anti-money laundering, transparent and welcoming regulation.”

He then tweeted that Binance uses similar or even stronger anti-money laundering tools than banks. Zhao added that the exchange has worked with law enforcement agencies around the world and has a number of thank-you letters to back it up.

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