US Senators Are Investigating Binance for “Potentially Illegal Business Practices”

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Last Updated on March 3, 2023 by Bitfinsider

In a letter to Binance and Binance US on Wednesday, U.S. Senators Chris Van Hollen (D-MD), Roger Marshall (R-KS), and Elizabeth Warren (D-MA) demanded that the cryptocurrency exchanges “provide transparency about potentially illegal business practices.”

The letter, written to BAM Trading Services CEO Brian Shroder and CEO of Binance Changpeng Zhao (CZ), requests documents and responses about each cryptocurrency exchange’s “finances, risk management, and regulatory compliance as it faces investigations into potential crimes.” The senators provided more information in their letter. Binance and Binance US, its American affiliate, are distinct legal entities. Binance US is a trading name used by BAM Trading Services.

Following the collapse of crypto exchange FTX, Binance is facing multiple investigations by law enforcement and regulators, according to multiple media reports. The senators also stated: “Binance and its related entities have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public.”

“Your actions have called into question the legitimacy of your business and the safety of your customers’ assets and raised concerns about the potential impact of these activities on the stability of the crypto market and the broader financial system,” the senators elaborated.

The letter also mentions the proof-of-reserves (POR) audit of Binance’s bitcoin assets that was conducted by French auditing company Mazars. The letter further states that the auditing company later “deleted the webpage containing the report” and paused its activity regarding proof-of-reserves audits for cryptocurrency companies.

The senators’ message was concluded by them asking for “documents and answers” to a series of inquiries by March 16. Complete copies of all Binance and Binance subsidiary balance sheets from 2017 to the present are among the documents the lawmakers are requesting, along with information on the company’s internal anti-money laundering (AML), countering the financing of terrorism (CFT), and know-your-customer (KYC) policies and procedures.

Gary Gensler, head of the U.S. Securities and Exchange Commission (SEC), Rostin Behnam, head of the Commodity Futures Trading Commission (CFTC), and Merrick B. Garland, head of the Department of Justice (DOJ), all received copies of the senators’ message.

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