Forbes Alleges Binance Schemes To Evade Regulators, Binance CEO Responds

In a report that came out about two hours ago ago, Forbes Crypto announced that they had acquired a document which paints a strategy that aims to circumvent U.S. crypto regulations. The document is said to be from 2018, with the anonymous source claiming that it was presented to Changpeng Zhao, Binance’s CEO, in Q4 of the same year.

Although Forbes has yet to share the entire document, a screenshot from one of the slides shows the “Tai-Chi Entity”, which Forbes alleges is a “yet-unnamed U.S. company”, the goal of which is to act as a distraction for US regulators, while Binance manages to find other ways of working with US clients. The creator of the document is supposedly former Binance employee Harry Zhou, co-founder of Koi Trading, which is a crypto exchange partially owned by Binance.

The report by Forbes then goes on to detail what is supposedly found on the rest of the leaked document. In short, it tries to make the point that Binance is already enacting this strategy by correlating parts of the scheme shown in the leaked document with real-world Binance events. These include Binance.US joining multiple self-regulatory organizations and the entity engaging multiple financial regulatory agencies – SEC, NYDFS, CFTC, FinCEN, among others.

More specifically, the report alleges the aforementioned “Tai-Chi Entity” and its purpose of being a “magnet for regulatory inquiries”. While it grabs the attention of regulators, Forbes argues, Binance would find other means of working with US clients, mainly through educating them of the use of a VPN, which would allow the to circumvent their physical location and trade on the main Binance exchange.

Towards the end of the article, Forbes stated that they had phoned an FBI agent in the Washington, D.C. FO regarding the existence of an investigation into the matter, but a “no comment” response was received.

Binance CEO Responds

Not long after the article was published, Binance CEO responded to the accusations in a series of tweets, the first of which read:

“FUD. The statements and accusations in the article are incorrect. The whole article hinges on a 3rd party document. The said document was not produced by a Binance employee (current or ex). Anyone can produce a “strategy document”, but it does not mean Binance follows them.”

He then continued to disavow the leaked document, saying that Binance’s goal is to always operate within the boundaries of the law, uphold the highest AML standards, and work with law enforcement agencies worldwide to prevent illicit activity.

Regarding the situation with Binance.US and the alleged “Tai-Chi Entity”, Zhao stated:

“Regarding the U.S., Binance has very strong restrictions and operating procedures in place, which is why we have the segregation of Binance U.S. as a standalone marketplace.”

The Forbes Crypto has not yet responded the The Chain Bulletin’s request for releasing the full leaked document.