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Binance circumventing US regulation? CZ denies it

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Binance US regulation

Binance allegedly acted to circumvent US regulation, or at least that’s what Forbes claims, a view strongly opposed by the CEO of the exchange Changpeng CZ Zhao.

Journalist Michael del Castillo is said to have come into possession of a document that proves that Binance was setting up a strategy to deceive regulators and make a profit from crypto investments in the United States. 

The document is dated 2018 and would have been created by a corporate employee. The plan was to interact with regulators in the United States, in a sense “distracting” them, while in the meantime the income from commission costs would be shifted to the parent company. The clients themselves would have been instructed on how to circumvent the geographical restrictions imposed by US regulation. 

Binance US, to comply with US regulation

The reality is that Binance had to open its own branch in the United States, Binance US, in order to comply with current regulations. Binance US was launched in September 2019 and is aimed at US traders, with some limitations compared to the Binance parent platform. 

For these reasons too, the Forbes article has been heavily criticised and branded as “FUD” (an acronym for Fear, Uncertainty, Doubt) by Binance CEO Changpeng Zhao. In a series of tweets, CZ has provided his version of the facts.

“The statements and accusations in the article are incorrect. The whole article hinges on a 3rd party document. The said document was not produced by a Binance employee (current or ex). Anyone can produce a “strategy document”, but it does not mean Binance follows them”.

CZ goes on to point out that Binance has consistently operated in accordance with the law and this is evident from the exchanges launched ad hoc for other countries to be in compliance with regulations. There is Binance US, but also Binance UK or Binance KR just to give a few examples. And, adds the CEO, Binance has always operated with the necessary licenses in all jurisdictions, working with other companies for better AML (anti-money laundering) tools.

CZ continues:

“We do not acknowledge the alleged document. Binance, together with our local partners’ actions of getting registered, licensed and regulated in multiple jurisdictions prove our commitment in doing things right”.

And concludes:

“Regarding the U.S., Binance has very strong restrictions and operating procedures in place, which is why we have the segregation of Binance U.S. as a standalone marketplace”.

Will this be enough to calm the dust? 

 

The post Binance circumventing US regulation? CZ denies it appeared first on The Cryptonomist.

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