Financial Times: Binance Hid Links to China
- Binance allegedly used VPN services to mask its presence in China.
- Binance employees in China were strictly warned against publicly identifying with the exchange.
- Binance has frequently been touted as a state-owned crypto exchange. The company, has, however, denied any involvement with the Chinese government.
A new report by the Financial Times claims that crypto exchange Binance hid its deep ties with China for several years. Citing internal documents, the Financial Times claimed that the company’s CEO, Changpeng Zhao, and other top individuals within the exchange repeatedly gave orders to staff members to cover up Binance’s Chinese presence. The exchange also tried to hide details of a Chinese bank used to pay employees’ salaries as well as an office address used until 2019.
Zhao reportedly messaged Binance employees in 2017 saying, “We no longer publish our office addresses . People in China can directly say that our office is not in China.”
The new discovery is a huge contradiction to Binance’s claims that it left China after the industry-wide raid in 2017. Zhao, at the time, claimed most of Binance’s employees had left China other than “a small number of customer service agents.” But the documents reveal how hard Binance tried to keep its operations under wraps.
Binance has also denied being registered or incorporated in China. The crypto exchange wrote in a message that “the original founding team members that were based in Shanghai left China just two months after the company was organized, before the company was even incorporated, following crackdowns on the crypto industry in China.”
Binance, like the rest of the crypto world, has faced increased scrutiny. US regulators sued the exchange on Monday, claiming it illegally provided services to US residents. The Commodity Futures Trading Commission claimed Binance, led by its CO, Zhao, deliberately tried to avoid regulation and failed to disclose its operations.
Zhao has publicly denied Binance being a Chinese company. As per the Financial Times, a Binance spokesperson was quoted saying, “It is unfortunate that anonymous sources are citing ancient history (in crypto terms) and dramatically mischaracterizing events. This is not an accurate picture of Binance’s operations.”
The news of Binance’s ties with China will undoubtedly be a huge blow to Binance.US’s proposed $1 billion purchase of assets belonging to Voyager Digital. A former employee of the Committee on Foreign Investment in the United States (Cfius) has expressed concerns with any “deal that traces back to China.”
In defense of its ties with China, Binance explained that “the Chinese government, like any other government, has no access to Binance data except where we are responding to lawful and legitimate law enforcement requests.”
Binance was also said to have used VPN services to hide its location in China. Surprisingly, the CFTC’s lawsuit accused Binance of a similar act. The crypto exchange faces a heavy task to establish itself as a company of integrity.
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