A new report from Reuters has revealed that Binance may have enabled money laundering on its platform due to its loose compliance with regulations.
According to the report, Binance maintained weak control over customers, hid information from regulators and acted against the recommendations of its compliance department.
Is Binance Regulatory Compliant?
This new allegation comes as the exchange is ramping up its efforts to brand itself as a regulatory-friendly platform.
The world’s largest crypto exchange by trading volume was at the center of several regulatory clampdowns last year. But it has maintained its willingness to work with regulators and meet compliance requirements.
A Reuters investigation found that while Binance continues to publicly talk about regulatory compliance, its private actions do not coincide.
… New Report Says It’s Not
Per the report, Binance CEO Changpeng Zhao’s public statement about welcoming regulatory oversight is simply a hoax. It turned out that the exchange is not cooperating fully with the regulators.
Reuters notes that Binance’s claim to be governed under the laws of Malta is misleading. Although the exchange had approached the Malta authorities for the license and the proposed transfer, it ultimately did not comply.
Sources close to the matter claim that the exchange was withdrawn due to strict anti-money laundering regulations in the island nation.
The investigation also revealed that several top executives of the company had expressed concern about compliance levels. But the CZ-led exchange acted against these recommendations on several occasions.
By adopting an opaque corporation, the firm has operated outside national regulations. Furthermore, the company declined to state its jurisdiction, making it difficult for regulators to monitor its operations.
Notably, regulators in South Africa, the United Kingdom, Singapore and other countries have warned consumers against using the platform.
The information for the report was obtained through interviews with former top executives and employees and review of various official documents.
CZ replied to Reuters
Changpeng Zhao has responded to the report claiming that it is just FUD. A tweet by the crypto billionaire said, “Journalists are talking to people who were dumped from Binance and who were not partners, trying to defame us. We are anti-money laundering, transparent and We are focusing on welcome regulation.”
that later tweeted That Binance uses a similar or even stronger anti-money laundering tool than banks. Zhao also said that the exchange has worked with law enforcement agencies around the world and has several thank you letters to show for it.
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