The letters accuse Binance and Binance.US of being a "hotbed of illicit financial" activities. It also accuses the exchanges of transferring billions to criminals and sanctioned entities.
In their letters, the US senators accused the exchanges of failing to comply with US laws. Senators are demanding that crypto exchanges provide details of their balance sheets and show proof of actions they have taken to comply with United States laws.
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The letter was issued by Senators Chris Van Hollen, Roger Marshall, and Elizabeth Warren. In their letter to Binance CEO Changpeng "CZ" Zhao and Binance.US CEO Brian Shroder, they stated:
[What] little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity that has facilitated over $10 billion in payments to criminals and sanctions evaders.
The letter highlighted a recent Reuters report, which claimed there was a lot of coordination between the two platforms. These concerns are similar to those expressed by Texas officials in their recent objection to the Voyager Digital restructuring plan.
Texan officials claim that CZ owns a majority stake in Binance.US and Binance. The Reuters report revealed that Binance was in control of a bank account owned by Binance.US.
The letter notes that Binance.US customers have full access to Binance, which they should not have access to. They also drew parallels to Binance and the collapsed crypto exchange FTX.
According to the three senators:
Zhao’s assertion that Binance.US is fully independent is eerily similar to claims Sam Bankman-Fried made regarding the distinction between FTX US and FTX – claims that appear to be false, given that FTX US has filed for bankruptcy.
Binance has been facing regulatory headwinds in the US, which have intensified since the collapse of FTX. Recently, a crypto exchange Binance representative noted:
Unfortunately, a lot of misinformation has been spread about our company, and we look forward to correcting the record.
It is not the first time US Senator Elizabeth Warren involved herself in crypto-related matters. In January, Warren urged the US Securities and Exchange Commission (SEC) to “double down” on its efforts to regulate the crypto industry.