In an internal memo to employees on Thursday, the CEO and co-founder of crypto exchange Binance, Changpeng Zhao, warned against sending implicating chats in the company’s database. CZ noted that although Binance does not check employees’ chat logs, they are the first thing investigators ask for and use during an investigation.
The mail was necessitated after the United States Securities and Exchange Commission (SEC) sued Binance for violating securities laws and using investors’ funds for personal bidding. According to documents revealed by the SEC, prominent members of Binance made certain implicating statements in the exchange’s employee chat log.
CZ called for sensitization of information sent via the firms’ chat, stating that since it complies with investigations, such conversations would surface on the internet repeatedly. The Binance boss also called on employees to discuss disapprovals with their immediate managers rather than “ranting privately” and indicting the exchange in the future.
Indicting Private Chats
The SEC brought forward evidence for its charges against Binance, mostly from extracts in the exchange’s private chat. The regulator quoted scenarios where former employees allegedly revealed implicating information regarding the operation of the enterprise.
One of their pieces of evidence showed a chat between former compliance lead Samuel Lin and head of business development Alvin Kan, where Lin made comments about the risks of holding the exchange’s local token, Binance Coin (BNB).
Lin also made comments about how Binance was operating as an unlicensed securities firm and how unclean the exchange was. Lin was quoted saying: “There is no way we are clean. I have seen nothing to prove we are.”
Among the evidence is a translated voice note from CZ on how Binance can still allow US citizens to use the platform via VPNs and foreign KYCs after publicly announcing it has cut them off. The translated audio revealed that Binance intended to ignore the IP addresses of US residents who used other means to access the exchange while preventing the regulators from troubling them.
CZ Calls on Employees to Continue Building
The Binance boss called on his employees to continue building “products that people use.” CZ noted that although these are trying times for the exchange, it will continue to put its heads down and solve problems.
Zhao cited responses from users who continued to support the resilience of the exchange in the face of FUD. He also noted that the crypto firm would continue to hold high ethical standards and protect its users.
