FT reports Binance’s ties to China

For several years, Binance hid its ties to China, contrary to management statements that the exchange had left the country in late 2017. The FT reports this, citing internal company emails.

Binance CEO Changpeng Zhao, along with other top executives, allegedly repeatedly instructed staff to hide the exchange’s presence in China. The latest included an office that operated at least until the end of 2019 and the use of a local bank to pay salaries.

“We are no longer publishing the addresses of offices… people in China can simply say that we are not there,” the newspaper quotes Zhao’s message in a work chat in November 2017.

At the end of 2019, staff discussed media reports about Binance’s plans to establish a headquarters in Beijing.

“Reminder: publicly we have offices in Malta, Singapore and Uganda. Please do not confirm any other jurisdictions, including China,” — the post said.

In 2018, Chinese employees were told that salaries would be paid through a bank in Shanghai. According to the FT, in mid-year one of the employees welcomed the expansion of the team, expressing hope that the newcomers would like working here.

“Dear colleagues, please DO NOT WEAR clothing or accessories bearing the Binance logo in our office or around it. This is strictly forbidden,” the newspaper quotes one of the messages from that period.

In 2019, employees from the Chinese payroll were asked to attend a tax session at the office. The company also continued expanding the local staff, including a data analyst and a clearing specialist.

From the internal correspondence, it appears that the company instructed new hires on how to use VPNs to conceal its location.

Binance said that members of the original team left Shanghai two months after the exchange’s founding. The company maintains that it was never a registered legal entity in China.

“It is inappropriate that anonymous sources quote an ancient (by crypto industry standards) history and misinterpret events. This is a distorted picture of Binance’s actions,” the statement said.

As reported, on March 27 the U.S. Commodity Futures Trading Commission filed a civil suit against the exchange and Changpeng Zhao.

In January, media reported that U.S. authorities are investigating ties between hedge funds and Binance. Earlier, it emerged that the U.S. Department of Justice was weighing the possibility of bringing criminal charges against the company.