Changpeng Zhao strikes back after serious allegations were leveled against the stock market, particularly its US arm
Following allegations against the exchange, Binance CEO Changpeng Zhao has hit back, stating that the exchange did not establish the US arm with the intention of bypassing enforcement. Zhao also claimed that there was no profit motive behind the move either.
“Binance has always operated within the limits of the law,” he said.
The allegations surfaced when Forbes reporter Michael Del Castillo noted in an in-depth article that there were questionable reasons for the stock market pegging its U.S. arm. The article was published yesterday and Forbes claims to have a leaked presentation outlining Binance’s plans in the US.
The document states that prior to the launch of Binance US two years ago, the exchange wanted to set up a tai chi unit in the country to act as a shield. The company would protect the main business of the exchange from regulation.
“While the then-unnamed company was setting up offices in the US to distract regulators with a feigned interest in compliance, measures were being taken to transfer revenue in the form of license fees and more to parent company Binance. Meanwhile, potential customers were taught how to dodge geographic restrictions while technological workarounds were introduced, ”Castillo explained in the article.
Forbes has not disclosed the identity of the source of the leaked document. However, the news agency said the document was drawn up by Harry Zhou. Zhou, formerly Binance, is a co-creator of a California-based Koi Trading exchange. The outlet reported that the document was presented to Zhao in the final quarter of 2018 by Jared Gross, the exchange’s merger and acquisition manager.
About an hour after the piece was published, Changpeng Zhao struck back to clear the exchange name. Zhao denied most of the allegations that the leaked presentation was not created by an employee at the exchange.
He pointed out that Binance has a good relationship with multiple law enforcement agencies. Zhao added that the company has set up many exchanges in different countries, which proves it has no regulatory compliance issues.