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Binance provided a copy of the March 16 letter it sent to U.S. senators. It detailed its transparency efforts and experience with regulators as well as the challenges faced in dealing with government.
CEO of Company Changpeng Zhao (CZ) stated that the letter was sent. Senators Warren, Van Hollen, and Marshall and contained “lots of details.”
In a bipartisan request, Senators Warren and Van Hollen called for Binance’s financial records, risk management practices and regulatory compliance to be answered. The letter stated that the FTX scam warranted a closer inspection of crypto transparency, accountability, and compliance.
“Binance and its related entities have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public.”
Binance reacts
The March 16 letter — responding to the Senators — detailed information on the company’s compliance program, sanctions compliance, and cooperation and collaboration with law enforcement.
Binance claimed that it was the first non-U.S. major exchange to establish a mandatory Know Your Customer (KYC), process for all users. The compliance team includes over 750 employees, which include specialists with regulatory agency and law enforcement experience.
In respect of sanctions compliance, the company pointed out its adherence to the sanction laws of several jurisdictions — including those of the U.S. Furthermore, processes are in place to prevent access by sanctioned users, including IP blocks against OFAC-sanctioned countries and the use of “advanced third-party tools” to screen and monitor users.
The company has received over 55,000 requests for assistance from law enforcement so far. Responses are typically sent in three days. Binance claimed that its efforts in this field have led to the capture and impediment criminal enterprises.
CFTC sues Binance
The Commodities Futures Trading Commission sued Binance for alleged violations of the commodities law on March 27.
The filing contained multiple accusations that included failure to register with the regulator, “soliciting” U.S. users, and comments on its opaque company structure.