Forbes leaks documents on how Binance dealt with US regulations

Binance has been at the centre of controversy since Forbes suggested they have a strategy to evade US regulations + info. here.

Regulation is always a difficult issue for many companies, especially those in large but heavily regulated markets. This time we will discuss a somewhat controversial Forbes publication, which alleges that Binance had a plan to „dodge“ US regulations.

What did Forbes publish about Binance and US regulations?

According to Forbes, Binance, the largest crypto currency exchange, created a corporate plan in 2018 with two objectives. The first was to benefit from the US market, and the second was to avoid parallel regulatory scrutiny of the country.

The source cited for this information was a 2018 document/presentation obtained by the magazine. The leaked presentation describes a „Tai Chi entity“ that would channel revenues to Bitcoin Bank through a network of corporations without exposing its parent company to the financial regulator’s microscope.

According to the Forbes article, its source included a screenshot of a slide but not the entire presentation in which this was raised.

Forbes said the Tai Chi paper calls for the use of a „strategic“ virtual private network (VPN) to circumvent the Securities and Exchange Commission and the New York State Department of Financial Services.

The magazine also said that the document warns Binance employees not to work in the United States to mitigate „enforcement risks. Forbes further states that the document contains a „detailed strategy to distract“ U.S. regulators.

What did Binance’s directors say?

Regarding this article, Changpeng Zhao, the company’s CEO, commented on some of the responses on his Twitter account. Zhao said that Binance follows all local laws in the countries where they have a presence, including the United States.

Specifically, he stated that „Anyone can produce a ’strategy document‘, but that does not mean Binance follows them. He added that the slides Forbes is referring to were made by a third party, not his company.

Meanwhile, Forbes maintains that US affiliate Binance.US operates under a corporate structure similar to the „Tai Chi“ network. According to CoinDesk, Binance.US CEO Catherine Cooley has long refused to discuss ownership of Binance.US.

Therefore, we can say that the statements on this subject have been few, but as strong as possible. Caution is what characterises them, as they know what is at stake.

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