US Senators Ask Binance for Financial Statements, User Data

According to Wall Street Journal, three US senators issued a letter to Binance, asking the crypto exchange to respond to a list of questions regarding its anti-money laundering policies, finances, and user numbers, among other things. The senators accused Binance of being a “hotbed of illegal financial activity,” though the crypto exchange giant has denied the claims.

Binance “a Hotbed of Illegal Financial Activity”

A bipartisan group of senators sent a letter to Binance, saying the world’s largest crypto exchange is “a hotbed of illegal financial activity,” the WSJ reported on Thursday. Three senators, including Sens. Elizabeth Warren (D., Mass.), Chris Van Hollen (D., Md.), and Roger Marshall (R., Kan.), asked Binance boss Changpeng “CZ” Zhao and his top deputy Brian Shroder to respond to a series of legal and financial questions surrounding the company.

“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.”

– a bipartisan group of senators said in the letter to Binance.

More specifically, the senators asked Zhao and Shroder to provide copies of Binance’s balance sheets since 2017 and the estimated number of US-based users on Binance platforms during that period. Further, they requested documentation of the exchange’s anti-money laundering controls, additional information about the relationship between the global exchange and its US unit, and “any communications about alleged efforts by Mr. Zhao to limit compliance,” the WSJ report adds. Senators requested a response from Binance by Mar. 16.

A Binance representative told CoinDesk the crypto exchange regularly responds to queries from various jurisdictions, claiming the accusations in the letter were untrue. Nevertheless, the crypto exchange will respond to the Senators and provide the necessary information “to help them better understand why we remain the most trusted platform with users across the globe,” the spokesperson said.

The spokesperson said Binance is “looking forward to correcting the record,” adding that the company’s corporate entity does not operate nor has customers in the US.

US Authorities Continue to Crack Down on Crypto

The Senators’ accusations against Binance represent the latest effort by the US authorities in their clampdown on crypto companies, which has been intensifying recently.

Last month, a New York state regulator ordered blockchain firm Paxos to stop issuing new Binance USD (BUSD) tokens after the US Securities and Exchange Commission (SEC) said the BUSD is an unregistered security. Reports suggested that the investigation was triggered by USDC issuer Paxos, which told the New York State Department of Financial Services (NYDFS) that Binance was not correctly backing the tokens.

A few days earlier, the SEC announced it had charged the crypto exchange Kraken with breaching US securities law with its staking service. The securities regulator forced Kraken to shut down staking and pay a $30 million fine.

This article originally appeared on The Tokenist

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.