Binance’s response to U.S. Senators lacks financial information: Report

Binance has answered a let­ter from Unit­ed States Sen­a­tors from ear­ly March request­ing infor­ma­tion about the cryp­to exchange oper­a­tions in the coun­try, includ­ing its bal­ance sheet. 

Accord­ing to a report on March 18, Binance’s response did not include the finan­cial data request­ed. Bloomberg learned from an anony­mous source that despite being omit­ted from the let­ter, the exchange sent the infor­ma­tion to U.S. regulators. 

In the 14-page doc­u­ment, Binance chief strat­e­gy offi­cer Patrick Hill­man dives into the exchange’s com­pli­ance his­to­ry, rec­og­niz­ing pre­vi­ous mis­takes and claim­ing the firm has built sol­id Know Your Cus­tomer and Anti-Mon­ey Laun­der­ing poli­cies in the past years. The response, how­ev­er, failed to address the sen­a­tor’s con­cerns about Binance’s lack of transparency. 

 Hill­man not­ed in the letter: 

“Binance lever­ages both inter­nal tools and tools from estab­lished third-par­ty ven­dors to scan user trans­ac­tions and pro­files in real time […] between August 2021 and Novem­ber 2022, Binance stopped over 54,000 trans­ac­tions as a result of trans­ac­tion mon­i­tor­ing alerts.”

On March 2, three U.S. sen­a­tors led by Eliz­a­beth War­ren sent a let­ter to Binance CEO Chang­peng “CZ” Zhao and Binance.US CEO Bri­an Shroder, rais­ing con­cerns about Binance’s activ­i­ties and request­ing the com­pa­nies bal­ance sheets.

Accord­ing to the Sen­a­tors, there is evi­dence that Binance and its Amer­i­can arm attempt­ed to evade U.S. reg­u­la­tors, evade sanc­tions and facil­i­tat­ed the laun­der­ing of at least $10 bil­lion. “What lit­tle infor­ma­tion about Binance’s finances is avail­able to the pub­lic sug­gests that the exchange is a hotbed of ille­gal finan­cial activ­i­ty,” the sen­a­tors wrote in the letter. 

Binance has pre­vi­ous­ly stat­ed that the two com­pa­nies are sep­a­rate enti­ties with inde­pen­dent man­age­ment and operations.

Among the sen­a­tor’s requests were “all Binance and Binance sub­sidiary bal­ance sheets from 2017 to the present,” as well as Anti-Mon­ey Laun­der­ing and sim­i­lar poli­cies, and doc­u­ments about the rela­tion­ship between Binance and Binance.US. 

The U.S. Secu­ri­ties and Exchange Com­mis­sion (SEC) launched in Feb­ru­ary a probe into Binance.US regard­ing trad­ing firms alleged to be con­nect­ed to Binance CEO Chang­peng Zhao. An inves­tiga­tive report has sug­gest­ed that Binance was behind a trans­fer of rough­ly $400 mil­lion in funds from a Binance.US account to a trad­ing firm man­aged by CEO Chang­peng Zhao.