Three U.S. senators are seeking documents and answers from crypto exchanges Binance and Binance US regarding “potentially illegal business practices.” The senators told Binance CEO Changpeng Zhao (CZ), ” Your actions call into question the legitimacy of your business and the safety of your customers’ assets.”
U.S. Lawmakers Investigate Binance
U.S. Senators Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), and Roger Marshall (R-KS) sent a letter to Binance and Binance US on Wednesday, asking the crypto exchange to “provide transparency regarding potentially illegal business practices and The letter requested that they “provide transparency.
The letter, addressed to Binance CEO Changpeng Zhao (CZ) and BAM Trading Services CEO Brian Shroder, asks for documentation and responses regarding each crypto exchange’s “financial, risk management, and regulatory compliance when faced with an investigation regarding potential criminal The senators detailed that they were seeking Binance and its U.S. affiliate, Binance US, are two separate entities; BAM Trading Services does business as Binance US.
Citing various media reports claiming that Binance is facing multiple investigations by law enforcement and regulators following the collapse of the crypto exchange FTX, the senators wrote:
Binance and its related entities have deliberately evaded regulators, moved assets to criminals and sanctions evaders, and withheld basic financial information from customers and the public.
“Your actions have raised questions about the legitimacy of your business and the safety of your customers’ assets and raised concerns about the potential impact of these activities on the stability of the crypto markets and the broader financial system.” The Senator emphasized.
The letter also noted that Binance hired French auditing firm Mazars to conduct a proof of reserves (POR) audit of its bitcoin holdings. However, the audit firm has since “removed the web page containing the report” and suspended its activities related to reserves proof audits for crypto companies, the letter adds.
At the end of the letter, the legislators requested “documents and answers” pertaining to the list of questions by March 16. The documents the senators requested included “complete copies of all Binance and Binance subsidiary balance sheets from 2017 to present,” as well as internal anti-money laundering (AML), counter terrorism financing (CFT), and customer intelligence (KYC) policies and procedures.
Copies of the Senator’s letter were sent to U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam, and U.S. Attorney General Merrick B. Garland of the Department of Justice (DOJ).
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