Elizabeth Warren demands answers from Binance CEO Changpeng Zhao regarding crypto exchange economics
US Senator Elizabeth Warren is investigating the crypto exchange Binance and its American arm Binance.US over the companies’ finances and operations.
In a new open letter addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder, Warren asks the two executives a series of questions, saying that retail investors deserve a “full, unfettered view of the relevant operations of the companies they entrust to their assets.”
It says in the letter,
“The companies’ apparent attempts to evade enforcement of anti-money laundering laws, securities laws, information reporting requirements and other financial regulations cast serious doubt on the stability and legitimacy of Binance and its related entities, and on your commitment to your customers. .”
The Massachusetts senator also accuses Binance and Binance.US of not having the necessary separation that they have claimed, comparing the two entities to collapsed crypto exchange FTX and its subsidiary FTX.US.
“MR. Zhao’s claim that Binance.US is completely independent is eerily similar to claims made by Sam Bankman-Fried regarding the separation between FTX US and FTX – claims that appear to be false, given that FTX US has filed for bankruptcy, users have lost access to their funds and the new CEO has declared that it is effectively insolvent.”
Warren lists seven demands from Zhao and Shroder. They are as follows:
“1. Please provide full copies of all Binance and Binance affiliate balance sheets from 2017 to present.
2. Please provide an estimate of the number and percentage of US-based Binance users during each fiscal quarter between 2017 and today.
3. Reports suggest that Zhao approved a 2018 plan to create a company, then called the “Tai Chi Entity,” that would “distract regulators with a purported interest in compliance…” Please provide all documents and communications related to this plan, including start-up, development and implementation.
4. Please provide complete copies of all internal anti-money laundering (AML) and counter-financing of terrorism (CFT) and know-your-customer (KYC) policies and procedures used by Binance, Binance subsidiaries and Binance.US, including in communications relating to AML/CFT policies and procedures.
5. Reuters reported that Zhao told Binance compliance personnel that he wanted “no KYC.” Has Mr. Zhao, at any time, directed or suggested to Binance and/or Binance.US employees that the Company should eliminate or limit Know-Your-Customer checks or otherwise weaken its anti-money laundering program? If so, please list all such communications.
6. Please provide complete copies of all written policies and/or procedures regarding the relationship between Binance and Binance.US. If any such policies and/or procedures were made known to investors, please provide copies of those communications.
7. Please provide a complete list of all US-based platforms that have at any time used Binance.com for trading services, lending services or other products or services.”
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Featured image: Shutterstock/Tithi Luadthong
