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Seeking Alpha 2023-03-06 14:42:03

Binance and Binance.US more intertwined than the crypto firms disclosed - report

Global cryptocurrency exchange Binance ( BNB-USD ) ( BUSD-USD ), in an effort to prevent the threat of U.S. prosecution, created an American business -- known as Binance.US -- in 2019, but the two entities have been more intertwined than disclosures have revealed, the Wall Street Journal reported, citing messages, interviews, and documents from 2018 to 2020. The companies have mixed staff and finances, the report said, and also shared an affiliated entity that traded cryptos. While Binance mostly operated from China and Japan, one-fifth of its customers were located in the U.S., where regulatory scrutiny of offshore crypto-focused firms ramped up since the collapse of FTX ( FTT-USD ) late last year, the WSJ noted. The global Binance exchange does not have authority to operate in the U.S. Furthermore, "Binance developers in China maintained the software code supporting Binance.US users’ digital wallets, potentially giving Binance access to U.S. customer data," the newspaper added. Of note, the Department of Justice and the Securities and Exchange Commission have been probing Binance's ties to Binance.US since 2020, the report noted, citing subpoenas and people with knowledge on the matter. Reuters recently reported that Binance in 2021 moved $400M from Binance.US's account at crypto-friendly bank Silvergate Capital ( SI ) to a trading firm managed by Binance CEO Changpeng Zhao. Last week, U.S. senators called on Binance to disclose its finances and raised doubts over its regulatory compliance.

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