Binance.US again in trouble | SEC continues to harass offshore presence

[Flexystar]

In the news today, we have Binance.US on target again. U.S. since the boom of crypto exchange from 2017 up trend has targeted the binance. Since US's decisions could be alarming to the existence of Binance and is due to the fact that Binance has almost fifth users from the US alone.

Binance originally operates from China and Japan hub. SEC has claimed that they only have US domain and nothing else to showcase to US authorities. For example, there is no physical offices in the USA neither there are any such registered entities for Binance US.

With that being pointed out, Binance is under trouble of getting warned by SEC for its practices and off shore business is no guarantee since they are not under their jurisdiction. There are talks that Binance might just segregate this issue by having Bianance.com and Binance.US as different domains and in the former one's US people would be filtered out.

However, authorities smell fishy practice here since this way Binance would be able to hide large chunk of the business from them.

Since the article is very very long, I am just quoting the initial information. Please visit the source provided for the whole news.

Binance exploded onto the crypto scene in 2017 and grew into the world’s biggest digital-currency exchange. It quickly ran into a problem.

It largely operated from hubs in China and then Japan, yet a fifth of its customers were in the U.S., where authorities signaled a coming crackdown on unregulated offshore crypto players. Any lawsuit from U.S. regulators would be like “nuclear fall out” for Binance’s business and its officers, a Binance executive warned colleagues in a 2019 private chat.

Worried about the threat of prosecution, Binance set out on a plan to neutralize U.S. authorities, according to messages and documents from 2018 to 2020 reviewed by The Wall Street Journal as well as interviews with former employees.

The strategy centered on building a bare-bones American platform, Binance.US, that would license Binance’s technology and brand but otherwise appear to be wholly independent of Binance.com. It would shield from U.S. regulators’ scrutiny the larger Binance.com exchange, which would exclude U.S. users.

But Binance and Binance.US have been much more intertwined than the companies have disclosed, mixing staff and finances and sharing an affiliated entity that bought and sold cryptocurrencies, according to the interviews and the messages and documents reviewed by the Journal. Binance developers in China maintained the software code supporting Binance.US users’ digital wallets, potentially giving Binance access to U.S. customer data.

If U.S. regulators conclude that these links mean Binance has control over a U.S. company, they could claim the power to police Binance’s entire business, which, to many investors, has been a black box since the start. This would also put Binance’s billionaire founder and chief executive, Changpeng Zhao, and his finances under closer scrutiny. Recently, a Texas financial regulator said in a court filing that Binance.US didn’t get a license to operate in the state because it wouldn’t provide financial information from its largest shareholder, Mr. Zhao.

The Securities and Exchange Commission and the Justice Department have been probing the relationship of Binance, which lists no headquarters, to Binance.US at least since 2020, according to subpoenas and people familiar with the matter. The Justice Department and the SEC declined to comment.

On Thursday, a bipartisan group of senators asked Binance to answer a series of questions, alleging it had “hidden basic financial information from its customers and the public.” Binance has also been in the crosshairs of some other countries, where it has been accused of operating without a license.

Binance is by far the largest cryptocurrency platform standing after the collapse last year of others such as FTX left the digital-currency world reeling. The swift collapse of FTX changed the calculus for U.S. regulators, who now are engaged in an intensive effort to rein in the $1 trillion crypto sector. Binance’s ability to navigate the industry turmoil and deal with regulators in the U.S. is a test case for the future of crypto.

Ninj0r [a Binance software developer]: Why did trading start? It’s not time yet!!! Who started trading? We had the trading timers set? Who started trading?

Other messages followed, including another urgent one from Ninj0r: someone started TRADING EARLY. Who did it? At 8:56:09.822 someone manually started trading. Who? Why?

Eventually, the company founder and chief executive answered.

Changpeng Zhao: a guy here in Shanghai, mistake operation.

Developers in Shanghai maintained key software functions at Binance.US at least through the summer of 2021, the Journal has reported. The Shanghai developers’ contracts were with Binance, not with the U.S. platform, according to a person familiar with the agreements.

The spokeswomen for Binance and Binance.US said the companies’ relationship is governed by licensing agreements, including for Binance’s technology. The Binance.US spokeswoman said that U.S. customer data is stored in the U.S. and that it and Binance never commingled user data.

The SEC has also been examining the relationship between Binance.US and two trading firms with ties to Mr. Zhao, Merit Peak Ltd. and Sigma Chain AG, the Journal has reported.

Texts From Crypto Giant Binance Reveal Plan to Elude U.S. Authorities
The exchange was intertwined with an American firm portrayed as independent. Now, regulators are circling.

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[bittraffic]

It's getting obvious already. First, the BUSD through Paxos and then this time, the binance.US which could mean they are to get binance.com. SEC has been the most corrupt so it's up to harass binance.com this time but like Ripple, Binance will be able to put up a big fight against them since they have the money. But I think they would have to provide evidence first on thier own before they can go on harassing.

[SquirrelJulietGarden]

Binance Team Fretted Over Binance US Ties, Tried to Recruit Gary Gensler: WSJ

CZ is smart enough to know importance of the USA. market and he tried to connect to Gary Gensler and wanted to hire that man for Binance. He failed to do so but he is also smart enough to quickly realize the long term impacts from a trade war between the USA. and China which started years ago.

By all of his smartness, he reacted very quickly for Binance to shift Binance out of the USA. and open a local branch in the nation. It is helpful for Binance to minimize impacts from the trade war between two giants and help Binance operating better against fuds and regulatory problems in the USA.

[adaseb]

They knew this would happen since after FTX they grew even bigger in size. Why are they doing this? Basically so the public thinks they are doing their job. The fact that they are going after the wrong exchanges like Kraken and Binance is ridiculous when they should of investigated FTX, Luna, 3AC, Gemini Earn last year.

This always happens when there is some big collapse or scandal. Kind of like after MtGox the regulators in Japan got very tight with regulating crypto. This will keep happening until something worse happens in the macro market and everybody will move on to that issue.

[Husires]

The US government started digging behind Binance, and I hope that this will end well. Binance has a lot of problems that is trying to hide, and any detailed research can reveal them, so I hope that it will end up with some sanctions, not like what happened with FTX.

CZ is smart enough to know importance of the USA. market and he tried to connect to Gary Gensler and wanted to hire that man for Binance. He failed to do so but he is also smart enough to quickly realize the long term impacts from a trade war between the USA. and China which started years ago.

Sometimes being smart is with governments isnot a good plan. You deal with a government and an angry audience behind it, so they will look for anything to condemn the platform, and Binance lacks many standards of transparency and always tries to hide themself.

[wajik-tempe]

Binance has responded by stating that it is committed to complying with all applicable laws and regulations, and that it is working to establish a stronger presence in the U.S. market. However, it remains to be seen how the situation will ultimately play out. The idea of segregating Binance.com and Binance.US into separate domains is not uncommon among cryptocurrency exchanges. Many exchanges have set up separate entities to cater to specific markets or regulatory jurisdictions. However, as you mentioned, such a move could potentially allow Binance to evade regulatory scrutiny in the U.S.

[Fivestar4everMVP]

Well, I know for sure that no body throws stones on a mango tree that does not have fruits, just in a few years of launching, Binance became so big, and we all know that US authorities, some how, aren't always in a good standing with crypto companies, most especially those that seem to be doing very well, I believe all this is simply because Binance allowed US users to use the exchange, and maybe they have not meet up with all the regulatory requirements as demanded by the US authorities.
They(Binance) have to either try to meet up with the regulatory requirement of the US authorities or give up allowing US users to access the exchange, this is the only way i think this constant harassments would stop.

[electronicash]

Well, I know for sure that no body throws stones on a mango tree that does not have fruits, just in a few years of launching, Binance became so big, and we all know that US authorities, some how, aren't always in a good standing with crypto companies, most especially those that seem to be doing very well, I believe all this is simply because Binance allowed US users to use the exchange, and maybe they have not meet up with all the regulatory requirements as demanded by the US authorities.
They(Binance) have to either try to meet up with the regulatory requirement of the US authorities or give up allowing US users to access the exchange, this is the only way i think this constant harassments would stop.

you can compare binance with FTX that within a few months, they also rise above thier competitors. binance however stays for a very long time causes SEC to worry already since it also collects worldwide data from crypto users.

CZ experimenting to hire Gensler seems funny. i would really see this like he was bribing Gensler lol is tempting because the guy is corrupt to the bones.

[Scripture]

Binance has responded by stating that it is committed to complying with all applicable laws and regulations, and that it is working to establish a stronger presence in the U.S. market. However, it remains to be seen how the situation will ultimately play out. The idea of segregating Binance.com and Binance.US into separate domains is not uncommon among cryptocurrency exchanges. Many exchanges have set up separate entities to cater to specific markets or regulatory jurisdictions. However, as you mentioned, such a move could potentially allow Binance to evade regulatory scrutiny in the U.S.

Probably also a way no to be compromised your whole exchange and that’s why you created one a specific site for a specific country that can focus on the regulations so Binance US should be different from the other site, and that’s the purpose of Binance. Well, SEC is attacking Binance since the BUSD issue and this is not the lone exchange at risk, i heard Kraken also have an issue with SEC, why not? Probably someone is playing here and trying to ruin the reputation of such exchanges, let’s just see how this will affect the market and the Binance itself.

[sheenshane]

It seems that Binance is facing more scrutiny from US authorities and IMO, this has a related issue with the FTX case.

If they do decide to take action against Binance, they will need to provide evidence to support their claims which is what I think they don't have yet.  In any case, Binance has the resources to mount a strong defense, as we've seen CZ the owner is very wise to make a defense towards his business.  It will be interesting to see how this situation develops in the coming weeks and months.

IMO, it's clear that there is growing scrutiny on the crypto industry as a whole, and companies will need to ensure that they are operating in compliance with regulations to avoid sanctions.

[hugeblack]

CZ experimenting to hire Gensler seems funny. i would really see this like he was bribing Gensler lol is tempting because the guy is corrupt to the bones.

Am I the only one who thinks that trying to hire Gary Gensler is a red flag? Isn't the platform trying to hide something, or trying to evade something, or at least trying to whitewash its image in front of legislators?

Here is another quote for their attempt to circumvent US scrutiny:

Despite announcing that it would stop accepting U.S. customers on its global platform, Binance officials discussed how to keep them. In a Telegram chat in June 2019, an employee noted that over 18% of page views on Binance.com were from U.S. users. Samuel Lim, then Binance’s compliance chief, suggested ways to retain the largest U.S. clients, including encouraging them to use a VPN to appear to be located in another country

They are definitely trying to hide a lot of things.

[Flexystar]

CZ experimenting to hire Gensler seems funny. i would really see this like he was bribing Gensler lol is tempting because the guy is corrupt to the bones.

Am I the only one who thinks that trying to hire Gary Gensler is a red flag? Isn't the platform trying to hide something, or trying to evade something, or at least trying to whitewash its image in front of legislators?

Here is another quote for their attempt to circumvent US scrutiny:

Despite announcing that it would stop accepting U.S. customers on its global platform, Binance officials discussed how to keep them. In a Telegram chat in June 2019, an employee noted that over 18% of page views on Binance.com were from U.S. users. Samuel Lim, then Binance’s compliance chief, suggested ways to retain the largest U.S. clients, including encouraging them to use a VPN to appear to be located in another country

They are definitely trying to hide a lot of things.

That’s the whole point here. Grey already has a bad past with the way they conduct business. When someone is flagged under a financial domain then they must not be trusted again ever. It’s also but obvious that such large entity with billions of dollars getting transacted just like that can have fishy business easily. You never know where the money is going and coming from unless and until your business books are perfectly clear.

As far as US involvement is considered they only want them for the USD investment and since many richest ones are there, they might need some help getting their money overseas. You know what I mean with this ?

[Falconer]

They are definitely trying to hide a lot of things.

I don't know what's really going on behind those opinions and some facts, but I don't think it's going to destroy bitcoin.
Losing a large number of US users would see trading volumes on Binance dump and it can also affect the price and marketcap of crypto in general. So they have to find a better solution.

But of course things like advising users to past the barrier with a VPN are inappropriate, it violates the rules that US users are supposed to abide by.

[hugeblack]

Grey already has a bad past with the way they conduct business. When someone is flagged under a financial domain then they must not be trusted again ever. It’s also but obvious that such large entity with billions of dollars getting transacted just like that can have fishy business easily. You never know where the money is going and coming from unless and until your business books are perfectly clear.

He will not agree to work for them, the successor of the economic man, far from central financing, and therefore he will contradict himself, but if Binance is serious about hiring him, then this means that they are ready to do everything to attract more customers.
To see how things go in the future.

[MIner1448]

I mean, this news is not good for Binance.
If regulators continue to make claims, this may lead to them being forced to make changes in their activities or even close. At the same time, such actions may affect users who use Binance to trade cryptocurrencies and the overall stability of the market.

[FUCKBSVFUCK]

It's just a guess, the two parties, as long as they are legit and the deal is not with Binance's clients. They are just people that are using exchanges in such cases. And they're only just in the media, not in the actual crypto world, not at all. 
 
So, they need a good deal of time and resources. They could have an exchange to support them, but this would be in the hands of SEC, it would mean they would have to look closely at its features. 
 
That's why they need to create a long term investment strategy. A good deal of patience will come.

[judaspriest]

it's no longer surprising that Binance US is always having problems,
because regulations in America are really very strict especially after the XRP and SEC cases all cryptocurrency projects there are thoroughly reviewed,
last time Ethereum also had a debate with the SEC and that could also be called a problem,
but Ethereum really answered it well, I hope for Binance to overcome regulation in USA too.

[tranthidung]

In the news today, we have Binance.US on target again. U.S. since the boom of crypto exchange from 2017 up trend has targeted the binance. Since US's decisions could be alarming to the existence of Binance and is due to the fact that Binance has almost fifth users from the US alone.

Under their chair leadership, Gensler, SEC did many law suits against cryptocurrency companies including some exchanges. Bittrex, Coinbase, Kraken and more, not only Binance US.

We must fight back SEC, from Ripple to Coinbase

Bittrex announced to leave the USA. but a few weeks later, SEC. decided to sue Bittrex, is it necessary?
Bittrex Shuts Down US Crypto Exchange Due to 'Regulatory Environment'
SEC Charges Crypto Asset Trading Platform Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency
Kraken to Discontinue Unregistered Offer and Sale of Crypto Asset Staking-As-A-Service Program and Pay $30 Million to Settle SEC Charges

The latest hearing in the USA. Congress sheds a light to us that there are many people in the Congress don't like what SEC. are doing with the lead by Gensler.

[el kaka22]

Another FUD created by USA to make Binance look badly, but it will never work because we dislike USA more than we dislike Binance so crypto world will mostly stay along side of Binance instead of trust the judgement of USA courts because that makes no sense. I mean SEC could say whatever they want, it doesn't matter, Binance could just close off binance.us and move on and they would still be huge, they were in billions of dollars worth of valuation before, and they can go back to that anytime they want to.

The biggest money maker is binance main website anyway, binance.us does make money, but it won't bankrupt the business if it is gone neither, so there is no need to fear SEC, they are just making some name for themselves by pushing their limits, that's it.

[Husires]

so crypto world will mostly stay along side of Binance instead of trust the judgement of USA courts because that makes no sense. I mean SEC could say whatever they want, it doesn't matter, Binance could just close off binance.us and move on and they would still be huge, they were in billions of dollars worth of valuation before, and they can go back to that anytime they want to.

I hope your trust in binance is correct, but I will not trust them too much. Binance manages billions of dollars and requires KYC. However, the simplest information such as its headquarters or organizational structure is unknown.

They cannot abandon binance.us, otherwise from the beginning they could have banned the United States from using their services. The American market is very large and has thousands of dollars, which is money that Binance needs this winter, so you will not easily think of giving it up.

That is if we ignore them attempts to evade compliance with the appropriate licensing in many countries.