Senators press crypto exchange Binance on potentially illegal business practices after FTX collapse

WASHINGTON — A bipartisan radical of senators asked Binance, the world's largest cryptocurrency speech and once-competitor to bankrupt crypto elephantine FTX, for elaborate accusation connected its concern operations amid accusations of amerciable practices.

Sens. Elizabeth Warren, D-Mass., Chris Van Hollen, D-Md., and Roger Marshall, R-Kan., requested a slew of documents connected institution finances, compliance and hazard absorption practices from Binance and its U.S. affiliate, Binance.US, successful a missive dated Wednesday.

"In the years since Binance's founding, the institution has faced progressively disturbing allegations regarding the legality of its operations," the senators wrote successful a letter addressed to Binance CEO Changpeng Zhao and Binance.US CEO Brian Shroder.

Binance did not instantly respond to CNBC's petition for comment.

The Justice Department began a criminal probe into Binance and Zhao successful 2018 — the twelvemonth aft the institution was launched — amid concerns the speech defied U.S. anti-money laundering and sanctions laws. The bureau has not decided whether to property charges against the institution oregon idiosyncratic executives.

Binance has go the definitive person successful the integer currency speech manufacture since FTX filed for bankruptcy and its founder, Sam Bankman-Fried, stepped down successful November. Bankman-Fried was aboriginal arrested and charged with defrauding investors, making unlawful governmental contributions and committing commodities fraud, among assorted different charges. Bankman-Fried has pleaded not blameworthy successful the case.

In their letter, the senators outlined the Justice Department's allegations against Binance, and contended the institution has showed a deficiency of transprency.

They besides accused Zhao of refusing to disclose the determination oregon entity of his speech "in what galore respect arsenic a blatant effort to dodge the world's fiscal regulators, service 'users without licenses,' and interruption anti-money laundering laws."

The Securities and Exchange Commission besides alleged Zhao utilized Binance.US arsenic a ammunition institution to distract U.S. regulators from amerciable activities, including that it allegedly processed astatine slightest $10 cardinal successful payments to criminals and U.S. sanctions evaders, the senators said successful the letter.

"Mr. Zhao's assertion that Binance.US is afloat autarkic is eerily akin to claims Sam Bankman-Fried made regarding the favoritism betwixt FTX US and FTX – claims that look to beryllium false, fixed that FTX US has filed for bankruptcy, its users person mislaid entree to their funds, and its caller CEO has declared that it is, successful fact, insolvent," the missive states.

The senators requested a database of 7 items, including implicit copies of institution equilibrium sheets dating backmost to 2017, copies of interior anti-money laundering policies and immoderate written policies connected the narration betwixt Binance and Binance.US by March 16.

FTX's collapse, which affected implicit 1 cardinal investors, highlighted "the request for existent transparency and accountability successful the crypto industry," the senators wrote.

"Binance is the world's largest cryptocurrency speech by volume, with implicit 120 cardinal users globally, meaning that it is uniquely positioned to facilitate illicit fiscal transactions astatine an unparalleled scale, imperiling the savings of millions of mundane users," they wrote.