The FT report, published on March 29th, claims that Binance had substantial ties to China for several years, contrary to the company’s claims that it left the country after a 2017 ban on crypto.
The Financial Times recently obtained documents that reveal Binance, the world’s largest cryptocurrency exchange, kept staff and operations in China despite announcing its departure in 2017.
The documents also suggest that Binance CEO Changpeng “CZ” Zhao and other senior executives have been concealing the company’s crypto exchange ties with China for years.
Binance had an office still in use by the end of 2019, and a Chinese bank was used to pay employees. In a message group sent in November 2017, CZ reportedly said, “We no longer publish our office addresses… people in China can directly say that our office is not in China,” according to the report.
However, employees were informed in 2018 that wages would be paid through a Shanghai-based bank, and a year later, personnel on payroll in China were required to attend tax sessions in an office based in the country. The messages obtained by the Financial Times also reveal that Binance employees discussed a media report that claimed the company would open an office in Beijing in 2019.
The report backs up accusations made in a lawsuit filed by the United States Commodity Futures Trading Commission (CFTC) against Binance. The lawsuit alleges that Binance obscured the location of its executive offices, as well as the “identities and locations of the entities operating the trading platform.”
According to the lawsuit, Zhao stated in an internal Binance memo that the policy was intended to “keep countries clean [of violations of law]” by “not landing .com anywhere. This is the main reason .com does not land anywhere.”
A Binance spokesperson said that “While we did have a customer service call center based in China to service global Mandarin speakers, those employees who wished to remain with the company were offered relocation assistance starting in 2021.”
The exchange claims that anonymous sources are citing ancient history and “dramatically mischaracterizing events. This is not an accurate picture of Binance’s operations.”
Despite the controversy, Binance remains a dominant force in the cryptocurrency market, with a daily trading volume of over $8.5 billion. The company claims it has never been registered or incorporated in China and does not operate there. Its 8,000 full-time employees live across Europe, the Americas, Middle East, Africa, and Asia-Pacific, according to Binance.