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Friday, March 31, 2023

Alleged Binance Scheme to Bypass US Controls Revealed

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The company of Chinese origin would have access to the data of the clients of its American subsidiary.

Binance returns to the spotlight after meeting internal documents in which an assumption is revealed company plan for avoid controls of the US authorities and potential sanctions that they could impose.

In recent months, Binance starred in numerous negative news. Among them, the company was linked to the money laundering from the shuttered crypto exchange Bitzlatofor being investigated for alleged money laundering in the United States and because of the accusations his stablecoin received, BinanceUSDfor which Paxos Trust, the company that issues it, stopped minting new tokens.

Strategy to avoid US controls?

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The novelty is that documents were revealed indicating that the company run by Changpeng Zhao devised a scheme to circumvent US regulators, The Wall Street Journal revealed, by accessing numerous Confidential company messages and documents.

in the beginnings of Binancea fifth of its customers were from the United States. Within this framework, as revealed by the US media, the company identified the threat that this could pose in the eyes of the US authorities and the “nuclear fallout” that this could generate for the company.

Thus, according to the disclosure of information, the company strategy to protect himself from US regulations he began to focus on the building an American platform basic, Binance USwhich would use the technology and the brand of Binance but Appearing total independence Of the same.

If US regulators conclude that the disclosure means Binance has control over the US company, they could demand to oversee the business of the Chinese company. It should be remembered that Binance is one of the most opaque companies in the sector since it is known, among other things, where it has its global headquarters. In fact, on multiple occasions Zhao he refused to dispel that doubt.

Relationship between Binance and Binance US?

The crux of what the documents would have shown is the degree of relationship that exists between the two companies. In that way, Binance and its US subsidiary would share one affiliated entity that bought and sold cryptocurrency and they would have mixed staff and finance.

In addition, the Binance Developers in China kept the software code that supported digital wallets of Binance US users. That could allow Binance have access to US customer data.

Source: Ambito

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