Binance, the largest crypto exchange in the world by market capitalization, has responded to a bipartisan letter from United States Senators requesting information regarding its operations since its launch in 2017.
The letter sent earlier this month by Senators Elizabeth Warren, Chris Van Hollen and Roger Marshall accused the exchange and its American subsidiary, Binance.U.S., of sanction evasion, money laundering and unlicensed money transmission. The senators claimed there was evidence that Binance committed the alleged crimes.
In a blog post dated March 28, 2023, the company’s chief strategy officer Patrick Hillmann addressed some of the issues outlined in the letter, emphasizing the company’s regulatory compliance.
Binance Blocks IP Addresses of Sanctioned Countries
Hillmann said the exchange had developed strong anti-money laundering policies and know-your-customer (KYC) protocols to combat illegal outflows of funds through the exchange.
“Binance takes sanctions compliance seriously and has voluntarily put in place measures to avoid involvement in transactions that would be barred by the trade restrictions and economic sanctions laws of several countries and organizations, including the United States,” Hillmann said.
In 2018, the exchange started blocking sanctioned users’ Internet Protocol (IP) addresses after updating its terms of service. The company extended the ban to countries sanctioned by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) in 2019.
The following year, after restricting registered users from the blacklisted countries, the firm introduced a standalone policy regarding servicing sanctioned users.
Strong Compliance Team
In addition to building robust security protocols, Hillmann said Binance has a strong compliance team of people with previous experience in law enforcement and regulatory agencies.
The Binance executive also noted that the firm engages and works with compliance experts in the U.S. to ensure adequate compliance with the Financial Action Task Force (FATF).
Hillmann also acknowledged Binance’s shortcomings and mistakes over the past few years, noting that the firm is imperfect.
He also claimed that Binance.U.S is a separate entity and does not belong to the exchange despite being owned by Changpeng Zhao (CZ). The Binance chief strategy officer disclosed that CZ is a board member of the American firm.
While Hillmann addressed the senator’s concerns regarding compliance, transparency, sanctions, and cooperation with law enforcement, he failed to include information relating to the company’s financials as requested.
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