The crypto industry has been a wild ride of events, from its inception to the present day. Binance, the world’s largest crypto exchange, has been at the forefront of this industry. However, internal documents obtained by a news outlet show strong links between Binance and China over the years, even after the great Chinese crypto purge of 2017.
According to a report by the Financial Times (FT), Binance has been hiding its operations in China despite its executives’ claims that the company had left the country after the Chinese government imposed a crackdown on the cryptocurrency industry in 2017. The report alleges that Binance CEO Changpeng Zhao and other top officials instructed employees to keep their Chinese presence discreet, including being mum on an office in China that was reportedly in use until at least the end of 2019 and utilizing a Chinese bank to facilitate the payment of some employees’ salaries.
The Binance and China Affair
Based on the documents FT is holding, Binance made a great deal of effort to conceal the details of its Chinese affairs, possibly in response to US regulators’ increased scrutiny of its crypto-related activities. The political and trade tensions between the US and China in the past couple of years may have played a crucial factor in its decision to keep its Chinese dealings under wraps, too.
As a result, the company is currently under probe by US regulators who suspect that it provided services to American clients illegally. Additionally, the Commodity Futures Trading Commission (CFTC) accused the company of intentionally evading regulation by not disclosing information about its executive offices and headquarters.
Binance Uncouples Links with China
To distance himself as much as possible from the issue, Zhao has vehemently denied being a Chinese citizen at present. He explained that although he was born in China, he is now carrying Canadian citizenship after moving to Canada during his childhood.
As for his company, the Binance boss admitted that it was founded in Shanghai. However, he insisted that the original founding team members left China two months after the company was organized following the crackdowns on the crypto industry there. Therefore, the crypto exchange firm has never been registered or incorporated in the giant Asian nation in any way.
Binance Paper Trail Leads to China
Internal company documents show that China has remained crucial to Binance despite the country’s tighter regulation of the cryptocurrency industry in 2017. The paper trail reveals that as late as 2019, Binance employees were being paid through a Shanghai-based bank, and there were times when employees were asked to attend tax sessions at a China-based office.
Furthermore, Binance continued to hire personnel for key positions in Shanghai, including data analyst and clearing specialist posts. This went on well after Zhao claimed that Binance had already packed up from China.
Final Thoughts
Overall, the revelation of the Binance and China affair could have significant implications for the crypto exchange’s operations and future growth prospects if proven true. The ensuing backlash will not only spell potential troubles coming from US regulators, but it could also seriously damage the company’s reputation and erode trust in its operations.