US & China's Crackdown on Binance: $40M Bribe Scandal! - Asia Express
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US & China's Crackdown on Binance: $40M Bribe Scandal! - Asia Express

written by John Murphy | March 31, 2023

It is reported that Binance has millions of US, and Chinese users, SBF was accused of $40 million in bribes, and blockchain executive Jun Yu was arrested. 

On March 27, U.S. Commodity Futures Trading Commission (CFTC) Binance, and its founder Changpeng Zhao were accused of knowingly circumventing federal law and operating an illegal digital asset exchange.

Key Takeaways

  • Binance reportedly has millions of U.S. and Chinese users.
  • Due to its low fees, Binance has quickly become the world’s largest cryptocurrency exchange.
  • China has banned cryptocurrency exchanges since 2017. 

Despite the exchange’s official position to ban U.S. users in its 74-page complaint, CFTC claims that at least 20% to 30% of the exchange’s traffic comes from U.S. customers or according to internal documents. Claimed to be of This equates to approximately 3 million U.S. users by mid-2020.

Cryptocurrency exchanges must be registered with the CFTC or the United States. Securities, Exchange Commission before soliciting U.S. clients. However, the CFTC claims that Binance ignored such a ruling.

The company’s management argued that regulation was “inappropriate” in light of Binance’s corporate structure and that simply avoiding it would be “more profitable.”

Since the allegations surfaced or Chicago-based quant trading firm Radix Trading has confirmed that Binance is one of three large trading firms named in the CFTC complaint. 

Founded by China’s C.Z. in 2017, Binance has quickly become the world’s most significant cryptocurrency exchange thanks to its low-fee trading mechanism and wide range of products. However, the business is also under heavy scrutiny by regulators, with what it says are lax KYC and anti-money laundering measures. 

The U.S.’ Unexpected Ally In The Fight Against Binance  

From bitter diplomatic disputes over human rights issues to conflicts in the South China Sea, two major superpowers, the United States and China, often find little familiarity in everyday world affairs. However, the two finally seem to have found an entity worthy of their mutual contempt. It’s Binance.  

biance crackdown
Source: pakistantoday

Around the same time the CFTC released its survey of allegedly undisclosed millions of U.S. users of Binance, CNBC reported on March 23 that Binance employees or volunteers were allegedly harassing Chinese users. Shared a technique for bypassing the exchange’s KYC verification.  

Shared techniques include creating accounts with fake addresses, VPNs, and non-Chinese email addresses and linking them to Chinese ID cards. 

China has banned cryptocurrency exchanges since 2017. This is because its website is blocked, and powerful social platforms prohibit searches for keywords containing “Binance.” 

SBF Claimed To Have Paid $40 Million In Bribes To Chinese Officials  

In a series of new indictments filed against Sam Bankman-Fried (SBF), the founder of bankrupt cryptocurrency exchange FTX, prosecutors allege that SBF has accused one more Chinese government official of $40 million. Unban accounts associated with Hong Kong-based Alameda Research. 

In 2021, Chinese authorities allegedly froze $1 billion worth of cryptocurrencies from Alameda Research’s China exchange trading accounts as part of an ongoing investigation by a counterparty.

China banned exchanges in 2017, but the actual enforcement and user offboarding took place later. 

After months of unsuccessful attempts to unblock the account, a self-proclaimed effective altruist decided the wheels of justice needed a little grease on direct instruction from SBF, allegedly transferring $40 million from one of the company’s accounts to a private wallet in November 2021.