Reuters Claims that Binance Knowingly Avoided Regulatory Compliance

News agency Reuters published a report on Friday revealing the findings of an investigation into the regulatory compliance practices of the world’s largest cryptocurrency exchange by volume, Binance.

Reuters’ report is based on the accounts of Binance’s former senior employees and advisers, together with certain internal correspondence and confidential messages between national regulators and the exchange.

The authors make the bold claim that the company’s CEO Changpeng “CZ” Zao, did not have the needed controls in place and had been negligent in leading his business. While proclaiming to be transparent, compliant and cooperative when it comes to government oversight, the reports notes that the exchange systematically snubbed watchdog’s requests for financial and corporate structure information and did not do implement the needed background checks like Know Your Customer/Anti-Money Laundering (KYC/AML).

Furthermore, the Binance CEO allegedly dismissed internal recommendations from its compliance department in the onboarding process of new customers from seven countries designated to be of extreme money-laundering risk.

The authors of the report conclude that in the past years Binance tried to maneuver itself into a position where it could continue offering financial products without requiring to obtain approval or licenses to operate.

Binance, which in the past six months has established itself as a “compliant” company, responded to the report by stating the findings were based on outdated or outright false information.

Binance CEO “CZ” also commented on Twitter saying:

FUD. Journalists talking to people who were let go from Binance and partners that didn’t work out trying to smear us. We are focused on anti-money laundering, transparent and welcome regulation. Action speaks louder than words. Thank you for your unwavering support!

— CZ Binance (@cz_binance) January 21, 2022