Texts from Binance Reveal Plan to Elude US Authorities
Reuters writes: Binance, one of the world's largest cryptocurrency exchanges, developed a plan to avoid the threat of prosecution by U.S. authorities as it started an American entity in 2019, the Wall Street Journal reported on Sunday. The Wall Street Journal reports: Any lawsuit from U.S. regulators would be like "nuclear fall out" for Binance's business and its officers, a Binance executive warned colleagues in a 2019 private chat. Worried about the threat of prosecution, Binance set out on a plan to neutralize U.S. authorities, according to messages and documents from 2018 to 2020 reviewed by The Wall Street Journal as well as interviews with former employees. The strategy centered on building a bare-bones American platform, Binance.US, that would license Binance's technology and brand but otherwise appear to be wholly independent of Binance.com. It would shield from U.S. regulators' scrutiny the larger Binance.com exchange, which would exclude U.S. users. But Binance and Binance.US have been much more intertwined than the companies have disclosed, mixing staff and finances and sharing an affiliated entity that bought and sold cryptocurrencies, according to the interviews and the messages and documents reviewed by the Journal. Binance developers in China maintained the software code supporting Binance.US users' digital wallets, potentially giving Binance access to U.S. customer data. If U.S. regulators conclude that these links mean Binance has control over a U.S. company, they could claim the power to police Binance's entire business, which, to many investors, has been a black box since the start. This would also put Binance's billionaire founder and chief executive, Changpeng Zhao, and his finances under closer scrutiny.... Developers in Shanghai maintained key software functions at Binance.US at least through the summer of 2021, the Journal has reported. The Shanghai developers' contracts were with Binance, not with the U.S. platform, according to a person familiar with the agreements.
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