Binance Accused of Forming Entity to Deceive Regulators in…
CZ responded to the publication stating that the document was not produced by a Binance Holdings Limited employee as claimed.
According to a report initially published by Forbes, a document has been obtained exposing a foul attempt by Binance Holdings Limited to deceive the U.S. regulators as they make money from the market through a designed corporate structure.
The report states that before the company’s establishment in the US, they set up a “Tai Chi entity” in a bid to distract regulators as they pretend to have a keen interest in compliance. This was a malicious attempt to channel revenue in the form of licensing Fees and others to the Binance Holding Limited as they successfully distract regulators.
The found document was revealed to have the “Yield and Overcome” principle of the “Tai Chi Entity” aim to use the opponent’s weight against him. Binance.US formed as a subsidiary company to show a full submission to the US regulation is said to be a mere deception. This branch of Binance Holdings Limited meant to serve the U.S. customers surprisingly does not provide highly leveraged crypto-derivative trading even though it is allowed in the country. Binance went the extra mile to put measures in place to aid potential customers to evade geographical restrictions according to the report.
The document has a goal of mitigating U.S. law enforcement. This was meant to subtly reduce the effect of the U.S. regulation as they boldly indicated a statement that undermines the anti-money laundering and U.S. sanctions enforcement designed to expose illicit activities. It contains a bold statement that reads “Key Binance personnel continue to operate from non-U.S. locations to avoid enforcement risk”.
The leaked document that contains several foul strategies was said to have been created by former Binance Holdings Limited employee, Harry Zhou. He is also the co-founder of a cryptocurrency exchange based in San Francisco called Koi Trading. The document was submitted to the CEO of Binance Changpeng Zhao during the Q4 2018 by the alleged general counsel of the exchange, Jared Gross. Forbes said their many attempts to reach Zhao and the chief compliance officer Samuel Lim was infertile.
Binance CEO Denies Accusation
Though Forbes says they could not get a comment from the CEO of the company on the leaked document, Zhao responded to the publication stating that the document was not produced by a Binance Holdings Limited employee as claimed. He stated emphatically that Binance Holdings Limited does not have anything to do with the leaked document as they always operate within the framework of the law.
As part of the response, Zhao said the Binance Holdings Limited has always had a good collaboration with law enforcement worldwide, and their branches spread across other parts of the world is a manifestation of their compliance within the regulatory framework. Binance Holdings Limited was founded in 2017 and has since then emerged as one of the biggest exchanges in the world.
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