Reuters conducted an investigation into Binance and its CEO, Changpeng Zhao “CZ”, and it appears that they have discovered how the CEO and his employees conspired to avoid regulators in the United States and the United Kingdom.
The United States Department of Justice began looking into Binance for money laundering in 2018. It was permitted by CZ for lieutenants to establish up a new American exchange to shield Binance from regulatory scrutiny.
According to Reuters, this was done on purpose to maintain distance from authorities. After the CEO chose a new manager in the middle of 2022, over half of the U.S. compliance staff resigned.
Despite U.S. sanctions on Iran, at least $29 million was transferred via the exchange between two Iranian cryptocurrency exchanges. However, in public, Zhao has said he does not micromanage his subordinates.
Reuters think that he has created the firm around himself as a formidable leader devoted to secrecy, focused on market dominance, and sensitive to minute operational matters.
As the firm expanded, CZ focused on two countries—first China, then Japan—despite not having a legal right to do business in either. The Binance boss instructed workers to keep quiet about their workplace and office locations.
Over time, Binance tightened the reins on anonymity by making it illegal for workers to post about their whereabouts on social media, discuss their jobs in public, or even wear any apparel or accessories bearing the Binance logo, says Reuters. By being vague about its physical location, Binance has protected itself from international authorities.
How Binance allegedly plotted the same in the U.K.
Binance also tried to avoid regulatory oversight in the United Kingdom. In 2020, a Binance executive proposed to backdate a corporate document to escape an inspection of a Binance UK subsidiary under new illicit financing legislation, and Zhao approved the proposal, says Reuters.
