“We felt they crossed a serious line”: new portion of leaked Binance docs released

Last week, a new scandalous Reuters story about Binance was published (there have been four so far this year), revealing the secret inner workings of the world’s largest exchange. The article lists many serious violations of the law and also Reuters personally attacks the head of Binance, Changpeng Zhao (CZ).

The main point of the allegations 

According to the published information, Changpeng created documents “backdated,” hired experts to circumvent the US and UK legislation, did not follow the regulations (for which purpose they actively concealed office addresses, official correspondence, location and names of employees, as well as data on the structure of the 73 offices of the company). 

In addition, efforts were made to conceal relevant facts from the authorities (destruction of documents). Finally, the CEO of Binance was accused of micromanagement, often personally conducting spot checks on his staff. 

The entire article is built on many quotes from leaked internal documents, presenting a very interesting documentary investigation into the semi-criminal style of the world’s largest cryptocurrency exchange. Overall, the article pays a lot of attention to the personality of CZ, making him the central anti-hero of the story.

Binance, the world’s largest crypto exchange, and its billionaire founder Changpeng Zhao have dodged scrutiny by financial regulators in the U.S. and UK, @Reuters reporting shows.

Now there are signs that the strategy is fraying https://t.co/cWBvUPRCWX pic.twitter.com/rcd4tFWaep

— Reuters (@Reuters) October 17, 2022

You can read more in the original article on Reuters Investigates.

Exchange Reaction

Binance itself chose not to answer qualifying questions, which Reuters kindly asked the exchange before the publication, giving it the opportunity to present its opinion, too.

CZ reacted to the publication:

Another flagrantly inaccurate ‘report’ on Binance from the usual suspects. We felt they crossed a serious line. Threatened to doxx my family. So the team agreed not to engage.

Later, the exchange gave an official response, where it very briefly answered each of the problems in the original article. In particular, in response to the accusation of micromanagement, a reference is given to an interesting internal document, in which the CEO is guided in the management of the company — CZ’s Principles. Additionally, CZ gave an interview to CNBC in which he tries to explain some of the strange facts previously published by Reuters (at the time of publication, this interview had not yet been posted to the public).

Monday #DIGEST

😀 Binance vs Media…
Reuters digging into CZ personal life resulted in Binance taking an unusual step of posting the full email chain https://t.co/pkGpUOWP9Z with the reports from Reuters. Juicy!#CryptocurrencyNews #CryptoNews #News pic.twitter.com/XxnEpb6oSS

— Hawex (@hawexcom) October 24, 2022

Almost certainly, Binance will not sue Reuters again, preferring to passively watch what is happening, limiting itself to brief and superficial explanations.

Binance’s attempt to satisfy the authorities

On a practical level in the work of Binance under the pressure of scandalous investigations, Reuters changed only one thing — in recent months, the exchange is making just a huge effort in the fight against cybercrime, trying to show the authorities its loyalty at least in this aspect of the activity.

Thus, the American division of Binance US announced the creation of a specialized department to investigate cryptocurrency crimes, which is headed by former FBI agent BJ Kang. He worked in the FBI for 17 years and specialized in the investigation of cybercrime. 

In his position, he will work closely with law enforcement and regulatory agencies, as well as other cryptocurrency companies, to identify, track and disrupt any illegal activity on the platform. This department, as announced, will have unique expertise in both crypto investigations and the ability to work closely with government and intelligence agencies.