Dimplx accused the cryptocurrency exchange Binance of deliberately distorting the annual report data of their UK joint venture. The Financial Times reports, citing documents for the FCA.
In documents submitted to the UK Companies House, the top management of the group noted that the exchange had transmitted inaccurate data on turnover, assets and liabilities of Binance Digital with the aim of underreporting the tax base.
According to the FT, the subsidiary was set up in November 2019 as a “payment-processing intermediary” (FCA registration date — February 2020). Dimplx holds 20% of the equity. The controlling stake is owned by Changpeng Zhao.
Dimplx allegedly said it planned to sue the Bitcoin exchange over the disputes but declined to disclose the substance of the claims.
“In light of the threat of litigation from Binance’s minority shareholders, the company cannot fully respond to the allegations. However, we understand that the opposing side is disappointed that the joint venture did not meet expectations,” said representatives of the Bitcoin exchange.
According to the year-end 2020 accounts, Binance Digital held around £100m in cash and/or bank balances, with liabilities of a similar magnitude.
According to Dimplx’s top management, the asset figure represented “funds received from Binance Digital customers as transaction fees on binance.com.”
The financial statements, in turn, recorded “zero turnover or commissions on any transactions conducted with any client during the financial year.”
The publication noted that the data raise questions about the role of British companies in Binance’s global operations in the run-up to the FCA ban on operations in the country in June 2021.
At the time, the regulator warned consumers that Binance Markets Limited is part of the Binance Group. The exchange failed to provide key information about its global operations, such as “trading names and functions for all group entities worldwide.”
Back in December 2021, the Binance CEO said plans to apply to the FCA for registration to become a fully “regulated firm” within 6–18 months.
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