Binance’s Response to US Senators Misses Financial Information: Report

Binance responded to a letter from US senators in early March asking for information about the crypto exchange business in the country, including the balance sheet.

According to a March 18 report, Binance’s response did not contain the requested financials. Bloomberg learned from an anonymous source that despite being omitted from the letter, the exchange had sent the information to US regulators.

In the 14-page document, Patrick Hillman, Binance’s chief strategy officer, delves into the exchange’s compliance history, recognizing past mistakes and claiming that the company has established a solid Know Your Customer and anti-money laundering policy over the past few years. However, the answer did not resolve the senator’s concerns about Binance’s lack of transparency.

Hillman noted in the letter:

Binance uses both internal tools and tools from established third-party vendors to scan user transactions and profiles in real time […] between August 2021 and November 2022, Binance stopped more than 54,000 transactions due to transaction monitoring warnings.

On March 2, three US senators led by Elizabeth Warren sent a letter to Binance CEO Changpeng “CZ” Zhao and Binance.US CEO Brian Shroder, expressing concerns about Binance’s operations and requesting the company’s balance sheets.

According to the senators, there are indications that Binance and its US arm have attempted to evade US regulators, evade sanctions and facilitate the laundering of at least $10 billion. “The little information available to the public about Binance’s finances suggests that the exchange is a hotbed of illicit financial activity,” the senators wrote in the letter.

Binance has previously stated that the two companies are separate entities with independent management and operations.

Among the senator’s requests were “all balances of Binance and Binance affiliates from 2017 to present”, as well as anti-money laundering and similar policies, and documents regarding the relationship between Binance and Binance.US.

The US Securities and Exchange Commission (SEC) launched an investigation into Binance.US in February regarding trading firms allegedly associated with Binance CEO Changpeng Zhao. An investigative report has suggested that Binance was behind a transfer of approximately $400 million in funds from a Binance.US account to a trading firm managed by CEO Changpeng Zhao.