US Senators allege Binance has ties to the Chinese Communist Party

US Senator from the Republican Party Bill Hagerty told the Senate Banking Committee that Binance has close ties to the Chinese government. The information was reported by reporter Brendan Pedersen.

Hagerty contends that Binance is “state-backed” and “tied” to the Chinese Communist Party.

These concerns were echoed by Democratic Senator Mark Warner.

In a statement to ForkLog, a Binance representative called these claims “inaccurate”:

“Binance is not a Chinese company and does not even do business in China. Binance is an international company with offices in Paris and Dubai, operating in dozens of countries around the world.”

He also emphasised that Binance does not seek to evade regulation and has repeatedly said that regulation is important for strengthening trust and protecting customers.

According to the exchange’s spokesperson, despite the recent news of outflows from the platform, Binance remains “in a very strong financial position”.

“Our capital structure has no debt, and all user assets are collateralized 1:1, so we always have more than enough funds to fulfil withdrawal requests,” he added.

Earlier, Changpeng Zhao said that Binance cannot be called a ‘Chinese company’, since it “has never been incorporated in the Middle Kingdom”. Zhao calls himself Canadian.

He regards rumors of ties to the PRC government as a defamatory attack on the company, aimed at undermining trust in the brand and reducing the number of new partners and investors.

Since 2018, U.S. authorities have been investigating Binance for alleged AML and sanctions-evasion violations. However, according to media reports, the case has stalled due to disagreements within the U.S. Department of Justice.

In 2020, U.S. prosecutors asked the exchange for internal information about its AML checks, as well as records involving Changpeng Zhao.

According to Reuters, Binance has repeatedly concealed information from regulators, neglected KYC procedures and acted against the recommendations of the compliance department.

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