Leaked Docs Reveal How Binance Dealt With US Regulations: Report

Crypto trading colossus Binance created a corporate plan for profiting from the U.S. market while avoiding regulatory scrutiny, Forbes reported Thursday, citing a 2018 document it obtained.

Oct 29, 2020 at 8:13 p.m. UTC
Updated Sep 14, 2021 at 10:25 a.m. UTC

Cryptocurrency trading colossus Binance Holdings Limited created a corporate plan for profiting from the U.S. market while avoiding the country's regulatory scrutiny, Forbes reported Thursday, citing a 2018 document it obtained.

  • The leaked presentation outlines a "Tai Chi entity" that would funnel revenue to Binance through a web of corporations without exposing its parent to the financial regulator's microscope, according to the Forbes article, which included a screenshot of a slide but not the entire deck.
  • When asked for comment, a Binance spokesperson directed CoinDesk to tweets by exchange CEO Changpeng "CZ" Zhao. He called Forbes' reporting bunk and asserted that Binance follows all local laws, including those in the U.S. "Anyone can produce a 'strategy document,' but it does not mean Binance follows them," said Zhao, adding that the slide deck was produced by a third party, not his company.
  • U.S. affiliate Binance.US operates under a corporate structure similar to the "Tai Chi" network, according to Forbes. Binance.US CEO Catherine Cooley has long refused to discuss Binance.US's ownership.
  • Binance in June 2019 unveiled plans to launch a U.S. exchange registered with the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department. The exchange updated its terms of service the following day to bar U.S. users from accessing Binance's global hub.
  • Forbes said the Tai Chi document calls for "strategic" virtual private network (VPN) usage to sidestep the Securities and Exchange Commission and New York State Department of Financial Services, and warns Binance employees against working in the U.S. to mitigate "enforcement risks." Forbes additionally claims the document contains a "detailed strategy for distracting" U.S. regulators.
  • Binance used to be based in Malta, but its headquarters location has been something of a mystery for most of this year. Zhao has been cagey on the matter in public appearances.
The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
A16z Doubles Down on Crypto Investments Despite Market Downturn, and NFL Launches Play-to-Earn NFT Game

The most valuable crypto stories for Wednesday, May 25, 2022.

The most valuable crypto stories for Wednesday, May 25, 2022.

CoinDesk - Unknown
2
CoinDesk - Unknown
OCC: ‘No Contagion’ Post-Terra Collapse

A surprisingly measured set of comments from Acting Comptroller Michael Hsu.

A surprisingly measured set of comments from Acting Comptroller Michael Hsu.

CoinDesk - Unknown
3
CoinDesk - Unknown
Nvidia’s Crypto Mining Chip Revenue Now 'Nominal' Following Months of Decline

A drop in crypto mining chip sales dragged down the chipmaker’s OEM business unit year-over-year.

A drop in crypto mining chip sales dragged down the chipmaker’s OEM business unit year-over-year.

CoinDesk - Unknown
4
CoinDesk - Unknown
How to Make It in the Metaverse

In this work of fiction, a woman buys a home in the metaverse because New York City rent is just too high. But virtual worlds exact their own cost of living. This piece is part of CoinDesk's Metaverse Week.

In this work of fiction, a woman buys a home in the metaverse because New York City rent is just too high. But virtual worlds exact their own cost of living. This piece is part of CoinDesk's Metaverse Week.

CoinDesk - Unknown