JAKARTA The world's largest crypto exchange by its daily trading volume, Binance, recently faced challenges from three US senators including Elizabeth Warren, Roger Marshall, and Chris Van Hollen. All three questioned the business validity and security of customer assets in Binance.
The three senators sent letters to Binance CEO Changpeng Zhao and BAM Trading Services CEO Brian Shroder. The letter contains requests for documents and answers related to finance, risk management, and compliance with regulations when dealing with investigations into potential crimes.
Binance and its affiliates in the US, Binance US, are two separate entities. BAM Trading Services runs a business as Binance US. The senators refer to media reports claiming that Binance is facing many investigations by law enforcement and regulators following the collapse of the FTX crypto exchange.
They alleg that Binance and its related entities deliberately avoid regulators, transfer assets to criminals and sanction evaders, and hide basic financial information from customers and the public.
This questions the business validity and security of Binance's customer assets and raises concerns about the potential impact of this activity on the stability of the crypto market and a wider financial system.
In the letter, senators also noted that Binance hired a French audit firm, Mazars, to conduct a proof-of-reserves (POR) audit of its bitcoin holdings. However, the audit firm later "deleted the web page containing the report" and stopped its activities related to audit proof-of-reserves for crypto companies.
The senators concluded their letter by asking for "documents and answers" regarding the question list no later than March 16. The requested documents include "complete copy of all Binance balance sheets and Binance subsidiaries from 2017 to the present," and anti-money laundering (AML) policies and procedures, against terrorism financing (CFT), and their internal know-your-customer (KYC) procedures.
A copy of the letter was also sent to Gary Gensler, chairman of the US Securities and Exchange Commission (SEC); Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC); and tonight B. Garland, US Attorney General of the US Department of Justice (DOJ).
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