Binance chief warns staff of surveillance via messaging apps

Binance CEO Changpeng Zhao (CZ) notified staff that law enforcement was monitoring internal chats.

SCOOP: Binance CEO CZ released an internal letter today to talk about the employee chat records disclosed by the SEC, saying that it has caused huge damage to the reputation; reminding employees that investigators will ask for your chat logs. And he cited this tweet first… pic.twitter.com/41g9KSIi93

— Wu Blockchain (@WuBlockchain) June 8, 2023

“Binance cooperates with investigators. The first thing they usually request is our chat logs. Everything you say may eventually appear in court (or on the internet),” Zhao wrote in an internal memo disclosed by reporter Colin Wu.

CZ cited a tweet that included the chat between Sam Lin (former head of compliance) and another employee. It discussed bonuses in BNB and mentioned the risks of the coin falling “to zero.”

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Evidence from SEC case against Binance including internal chat logs, first between Sam Lin (former compliance lead at Binance) and Alivn (previously head of BD)

First is their convo about equity bonuses where Sam talks about risks of holding BNB pic.twitter.com/96IfwJEUOT

— Adam Cochran (adamscochran.eth) (@adamscochran) June 7, 2023

Lin also said that the company operates as an unregistered securities exchange in the United States.

The U.S. Securities and Exchange Commission (SEC) used these messages as evidence in its suit against the exchange.

“Even though just five years ago two guys were talking privately, this is extremely damaging to our reputation,” Zhao said.

On June 5, the SEC filed suit against Binance and Zhao. The regulator brought 13 charges, including the sale of unregistered securities.

Subsequently there were reports that the Commission’s claims are similar to the allegations levelled by the agency against the failed crypto exchange FTX and its Alameda Research affiliate.

A group of U.S. senators has accused Binance of misrepresenting its business practices.

Against this backdrop, the U.S. unit announced a suspension of dollar deposits and urged clients to withdraw fiat funds by June 13.

As noted, the company’s lawyers called for the recusal of SEC chair Gary Gensler. According to the lawyers, in 2019 he sought the position of adviser to a Bitcoin exchange.