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March 2 (Reuters) – Three U.S. senators have asked the giant cryptocurrency exchange Binance and its U.S. partner Binance.US for information about their regulatory and financial compliance, citing a series of investigations by Reuters and some other media reports, according to a letter released on Wednesday.
In the letter, Democrats Elizabeth Warren and Chris Van Hollen, along with Republican Roger Marshall, called on Binance “to provide transparency about potentially illegal business practices,” adding that the exchange and its related entities “have purposely evaded regulators, moved assets to criminals and sanctions evaders, and withholding basic financial information from customers and the public.
In a statement, Binance said that “a lot of misinformation has been spread about our company” but that “we appreciate the senators’ request” and that it will provide information to help them better understand the firm.
The senators also questioned the legitimacy of the company’s operations and the security of its customers’ assets, in the letter addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder.
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The collapse of rival crypto exchange FTX, whose founder Sam Bankman-Fried has been charged with fraud, “underscored the need for real transparency and accountability in the crypto industry,” the senators wrote.
Warren and Van Hollen are members of the Senate Banking Committee.
The letter cited Reuters articles from last year that found Binance intentionally kept lax anti-money laundering controls, processed over $10 billion in payments for criminals and companies trying to evade U.S. sanctions, and planned to evade regulators in the U.S. and elsewhere .
The letter also cited a Reuters report in February that Binance had secret access to Binance.US’s bank account and was able to move $400 million to an account held by a trading firm managed by Zhao.
Binance.US publicly maintains that it is completely independent of the global Binance.com exchange and acts as its “US partner.” However, Reuters has reported that Binance actually created Binance.US as a de facto subsidiary to draw the scrutiny of US regulators away from Binance.com.
Binance has previously disputed Reuters’ articles, calling the illicit fund calculations inaccurate and the descriptions of compliance checks “outdated.” The exchange has said it “drives higher industry standards” and seeks to “further improve our ability to detect illegal crypto activity on our platform”. A spokeswoman for Binance.US said in February that “only Binance.US employees have access” to their bank accounts.
In the letter, first reported by the Wall Street Journal, the senators asked Binance and Binance.US to provide documents and answers to their questions by March 16.
The senators are seeking information about the companies’ balance sheets, US-based users, anti-money laundering policies. They will have written guidelines regarding Binance and Binance.US’s relationship.
Reporting by Angus Berwick; Editing by Anna Driver
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