Senators claim Binance lied to US lawmakers.
Bloomberg reported on June 8 that Binance may have given misleading information about its business dealings and relationship with its American unit in a letter sent to lawmakers in the United States in March. Senators Elizabeth Warren and Chris Van Hollen asked the Justice Department to investigate whether Binance made a false statement to Congress earlier this year. In a lawsuit filed on June 5, the Securities and Exchange Commission (SEC) alleged that Binance’s global entity and American unit were commingled.
In March, three U.S. senators led by Elizabeth Warren sent a letter to Binance CEO Changpeng “CZ” Zhao and Binance.US CEO Brian Shroder questioning the exchange’s operations and requesting balance sheets. At that time, the senators alleged that Binance and its American arm attempted to evade local regulators, avoid sanctions, and facilitate money laundering.
Binance’s Chief Strategy Officer, Patrick Hillman, responded to the senators’ request by sending the requested documents to Congress and a 14-page letter diving into the exchange’s compliance history, recognizing previous mistakes and claiming the firm has built solid Know Your Customer and Anti-Money Laundering policies in the past years.
The independence of Binance.US from its global unity is critical for two reasons: regulatory jurisdiction and liability in the event of a failure, Syracuse University law professor Jack Graves told Cointelegraph. Graves explained that if the companies were commingling funds, the owners, which is Binance’s global unit, would be responsible in the event of bankruptcy. On June 5, Binance’s global unit claimed it had “actively cooperated with the SEC’s investigations and […] worked hard to answer their questions and address their concerns.” Binance.US tweeted that the SEC’s claims are its “latest example of regulation by enforcement.”
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- DOJ urged to investigate Binance for possible lying to lawmakers by US Senators Bloomberg.
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The article also discusses the SEC lawsuit and Binance’s responses to it, along with the importance of Binance.US’s independence from its global unit.
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