Binance Faces Scrutiny as DOJ Probes Alleged False Statements and Compliance Concerns

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Binance, the world’s largest cryptocurrency exchange, and its US affiliate are being investigated in the US for alleged crimes like money laundering and tax offenses. Senators Elizabeth Warren from Massachusetts and Chris Van Hollen from Maryland have directed the US Justice Department to investigate Binance. They specifically raised concerns about potential false statements made by the company to lawmakers regarding its business operations. 

The SEC has raised concerns about Binance.US, the American affiliate of Binance, possibly not operating as a separate entity as claimed. Senators have written a letter to US Attorney General Merrick Garland, urging a thorough investigation into these issues.

Senators Accuse Binance and Binance.US of Providing False Information to Congress

In March, Senators Warren, Van Hollen, and Republican Senator Roger Marshall from Kansas requested information and financial data regarding the relationship between Binance and Binance.US. Binance responded by asserting that the two companies were separate entities and emphasized their commitment to compliance. However, the senators now claim that Binance and Binance.US provided false and misleading information to Congress, undermining the investigation and legislative process. 

Binance’s chief strategy officer, Patrick Hillmann, signed the response, which primarily focused on the company’s compliance efforts but lacked substantial financial details.

SEC Lawsuit Highlights Concerns Over Binance’s Compliance Efforts

According to the SEC’s lawsuit, Binance is accused of participating in the unregistered offering and sale of securities. The former Chief Compliance Officer of the exchange is alleged to have willfully violated US regulations, as indicated by private chats obtained by the regulatory authority. Moreover, Binance’s CEO, Changpeng Zhao, faces allegations of commingling investor funds with the company’s own funds.

The SEC further claims that both the international company and Zhao played a significant role in directing the operations of the US-based business. As part of their case, the SEC has requested a temporary restraining order to freeze certain assets.

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