Binance CEO Changpeng "CZ" Zhao and other senior executives have been for years concealing the crypto exchange ties with China, according to documents obtained by the Financial Times.
In a report on March 29, FT claims that Binance had substantial ties to China for several years, contrary to the company's claims that it left the country after a 2017 ban on crypto, including an office still in use by the end of 2019 and a Chinese bank used to pay employees.
“We no longer publish our office addresses . . . people in China can directly say that our office is not in China,” Zhao reportedly said in a company message group in November 2017.
Employees were told in 2018 that wages would be paid through a Shanghai-based bank. A year later, personnel on payroll in China were required to attend tax sessions in an office based in the country, according to FT.
Based on the messages, Binance employees discussed a media report that claimed the company would open an office in Beijing in 2019. “Reminder: publicly, we have offices in Malta, Singapore, and Uganda. [...] Please do not confirm any offices anywhere else, including China.”
The report backs up accusations made in a lawsuit filed on March 27 by the United States Commodity Futures Trading Commission (CFTC) against the exchange, claiming that Binance obscured the location of its executive offices, as well as the “identities and locations of the entities operating the trading platform.”
Related: Here’s why CFTC suing Binance is a bigger deal than an SEC enforcement
According to the lawsuit, Zhao stated in an internal Binance memo that the policy was intended to “keep countries clean [of violations of law]” by “not landing .com anywhere. This is the main reason .com does not land anywhere.”
In response to the FT report, a Binance spokesperson told Cointelegraph that the company "does not operate in China nor do we have any technology, including servers or data, based in China," adding that "we strongly reject assertions to the contrary." They continued: "To be clear, the Chinese government, like any other government, has no access to Binance data except where we are responding to lawful and legitimate law enforcement requests."
Binance spokesperson also stated:
"While we did have a customer service call center based in China to service global Mandarin speakers, those employees who wished to remain with the company were offered relocation assistance starting in 2021."
According to the exchange, anonymous sources are citing ancient history and "dramatically mischaracterizing events. This is not an accurate picture of Binance’s operations."
With daily trading volume of over $8.5 billion, Binance is the world's largest cryptocurrency exchange. The company claims it has never been registered or incorporated in China and does not operate there. Its 8,000 full-time employees live across Europe, the Americas, Middle East, Africa and Asia-Pacific, according to Binance.
Magazine: 4 out of 10 NFT sales are fake: Learn to spot the signs of wash trading