The U.S. Department of Justice should initiate an investigation into Binance to determine whether the cryptocurrency exchange lied to lawmakers about its business practices. This is stated in a letter from Senators Elizabeth Warren and Chris Van Hollen, reported by Bloomberg.
In their view, the company may have made false statements regarding the independence of its U.S. subsidiary.
“This is a serious issue,” the authors of the letter stressed.
On June 5, SEC brought a lawsuit against Binance and its CEO Changpeng Zhao. The regulator leveled 13 counts, including unregistered offers and sales of BNB and BUSD tokens.
According to the SEC, the head of the company “secretly controlled” the U.S. subsidiary. Earlier a similar conclusion was published by Reuters.
In March, Warren and Van Hollen, together with colleague Roger Marshall sent Binance a letter asking for detailed information about Know Your Customer/Anti-Money Laundering policies and money-laundering controls.
Moreover, the policymakers accused the platform of regulatory evasion and links to criminals, calling it a hotbed of illicit financial activity.
Zhao denied the accusations, noting that the platform’s primary priority is protecting users’ interests. According to him, the letter sent by the lawmakers was received for the first time. The company provided the senators with a response, but it hardly touched on the financial aspect.
In the spring, Binance faced a lawsuit by the U.S. Commodity Futures Trading Commission. The regulator contends the platform violated derivatives trading rules by operating without proper registration.