Binance’s CZ refutes report claiming company has been hiding China ties

Binance CEO Changpeng ‘CZ’ Zhao said the inherent transparency of blockchain technology is sufficient evidence to disprove false claims in “traditional media writing.”

CZ made the tweet after media reports alleging Binance hid its presence and links to China and did not leave the country in 2017 despite claiming to do so.

China allegations

According to a Financial Times report, Binance had “substantial” links to China despite the company’s claims it left the country in 2017, according to the latest report from Financial Times.

The newspaper claims to have insight into various company documents and internal communication channels that confirm these claims. The report found that Binance deliberately obscured the extent and location of its operations in China, as its presence in the country continued well after 2017. 

In 2018, employees were reportedly told they would receive waves through a Shanghai bank, while in 2019, some Chinese employees visited Binance’s office in China for a tax session. Various messages showed Binance employees discussing a Shanghai recruiting team and the conditions for hiring people in Shanghai. 

In mid-2018, employees were reportedly instructed not to wear clothes and accessories with Binance’s logo around the company’s office locations in China. The report also claims onboarding documents instructed new employees in China to use VPNs.

An unnamed former employee revealed that many of the company’s key developers are still in China. However, FT could only confirm the use of offices in China until 2020.

Legal troubles

These allegations come at a difficult time for the exchange. The company has been under heavy regulatory scrutiny since November 2022, as the collapse of FTX made it the largest and most popular crypto exchange on the market.

Earlier this week, the U.S. Commodity Futures Trading Commission (CTFC) sued Binance for illegally serving users in the U.S. The CFTC disputed Binance’s claims that Binance.US was an independent company, alleging that Binance’s executives dictate its operations. 

A federal judge temporarily halted Binance.US’s $1.3 billion acquisition of Voyager the same day after the Department of Justice (DOJ) filed an appeal over the approval of the sale. The pause will give the government more time to investigate the deal’s legality.

Additionally, U.S. senators issued a letter asking Binance to clarify various concerns, to which the exchange responded on March 28.

Binance said it believes regulation is the best way to protect users and continues to support the efforts of regulators and authorities around the world. It also clarified that the exchange’s operations are mostly on-chain and more transparent than traditional financial institutions.

The exchange also detailed its history and current operational status to alleviate the lawmakers’ concerns.

The senators did not publicly respond to Binance’s blog post as of press time.