Binance hid ties to China for years, even after 2017 crypto: Report

Binance CEO Changpeng “CZ” Zhao and other top executives have for years hidden the crypto exchange’s ties to China, according to documents obtained by the Financial Times.

In a March 29 report, the FT claims that Binance had significant ties to China for several years, contrary to the company’s claims that it left the country after a 2017 crypto ban, including an office that was still in use by the end of 2019 and a Chinese bank used to pay employees.

“We no longer publish our office addresses . . . People in China can directly say that our office is not in China,” Zhao reportedly said in a company message group in November 2017.

Employees were told in 2018 that salaries would be paid through a Shanghai-based bank. A year later, staff on payroll in China were required to attend tax sessions at an office based in the country, according to the FT.

Based on the messages, Binance staff discussed a media report that claimed the company would open an office in Beijing in 2019. “Reminder: publicly we have offices in Malta, Singapore and Uganda. […] Please do not verify any offices elsewhere, including China.”

The report supports allegations made in a lawsuit filed on March 27 by the United States Commodity Futures Trading Commission (CFTC) against the exchange, alleging that Binance concealed the location of its executive offices, as well as “the identities and locations of the entities operating the trading platform.”

Related: Here’s Why CFTC Sues Binance Is a Bigger Case Than an SEC Enforcement

According to the lawsuit, Zhao stated in an internal Binance memo that the policy was intended to “keep countries clean [of violations of law]” of “.com doesn’t land anywhere. This is the main reason why .com does not land anywhere.”

In response to the FT report, a spokesperson for Binance told Cointelegraph that the company “does not operate in China nor does it have any technology, including servers or data, based in China,” adding that “we strongly reject allegations that opposite.” They continued: “To be clear, the Chinese government, like any other government, has no access to Binance data except where we respond to legal and legitimate law enforcement requests.”

Binance spokesperson also stated:

“Although we had a customer service center based in China to serve global Mandarin speakers, those employees who wished to remain with the company were offered relocation assistance beginning in 2021.”

According to the exchange, anonymous sources cite ancient history and “characterize events dramatically. This is not an accurate picture of Binance’s operations.”

With a daily trading volume of over $8.5 billion, Binance is the world’s largest cryptocurrency exchange. The company claims it has never been registered or incorporated in China and does not operate there. Its 8,000 full-time employees live across Europe, the Americas, the Middle East, Africa and the Asia-Pacific, according to Binance.

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