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Binance has disregarded accusations that the company established Binance US to skirt American prosecution, as previously reported by The Wall Street Journal (WSJ).
“When Binance US was founded, there was an agreement with the Binance.com tech team to build out the tech infrastructure and provide other forms of support for the new US-regulated exchange,” a Binance spokesperson told Tech in Asia. “It was a white-label service that supported other exchanges. That is why you’re seeing these old communications between members of the two organizations.”
According to the WSJ, Binance US was established through a partnership with BAM Trading Services, a Delaware-based firm founded by CEO Changpeng Zhao in February 2019.
However, the report noted that it was not revealed at the time that Zhao had control over the BAM via entities registered in the Cayman Islands and British Virgin Islands.
The WSJ report showed a 2019 message from a Binance software developer asking why trading on Binance US started early, which Zhao responded to by saying that the early trade was mistakenly enabled by a staffer in Shanghai.
In another instance, an employee tried to make a Google Form for new Binance US customers but encountered difficulties changing the form’s creator from Binance.com to Binance US.
“We have already acknowledged that we did not have adequate compliance and controls in place during those early years. Specifically, like virtually every other crypto exchange, we did not have proper KYC in place at launch,” the Binance spokesperson noted.
The person added that Binance.com and Binance US are separate legal entities. “The name is shared simply because of a branding agreement,” they said.
The report is the latest in Binance’s regulatory concerns. Earlier this month, Zhao took to Twitter to distance the exchange from FTX. The tweets were prompted by an editorial published by Forbes that drew parallels between the two – specifically Binance shifting US$1.8 billion in assets.
See also: Australian stablecoins show promise as a16z-backed Archblock eyes market
Editing by Thu Huong Le and Lorenzo Kyle Subido
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