Binance, one of the world’s largest cryptocurrency exchanges, has responded to a letter from US senators sent on March 2nd, which raised concerns about the exchange’s activities and requested financial data. The senators, led by Elizabeth Warren, claimed that there is evidence that Binance and its American arm attempted to evade US regulators, evade sanctions and facilitated the laundering of at least $10 billion. They requested “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.
Binance’s response, which was reportedly sent to US regulators but did not include the financial data requested by the senators, was a 14-page document that emphasized the exchange’s compliance efforts and recognized past mistakes. Binance’s chief strategy officer, Patrick Hillman, noted in the letter that the exchange has built solid Know Your Customer and Anti-Money Laundering policies in recent years and leverages both internal tools and tools from established third-party vendors to scan user transactions and profiles in real time. Hillman also stated that between August 2021 and November 2022, Binance stopped over 54,000 transactions as a result of transaction monitoring alerts.
Despite Binance’s emphasis on compliance, the exchange’s response failed to address the senators’ concerns about transparency. The senators had claimed that “what little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity.” Binance has previously stated that Binance and Binance.US are separate entities with independent management and operations.
The US Securities and Exchange Commission (SEC) launched a probe into Binance.US in February 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 Zhao. The exchange has also faced regulatory scrutiny in other countries, including the UK and Japan.