binance.us - Pwim.Net

Binance CEO CZ Denies that US Exchange Arm Was Created to Distract Regulators

A leaked document obtained by Forbes has indicated that Binance exchange’s US arm was set up to avoid regulation—a claim that CEO Changpeng Zhao (CZ) vehemently denies.

Changpeng Zhao, CEO of Binance, is denying all allegations that the crypto exchange’s United States arm was set up to avoid regulation and profit from investors.

According to a report from Forbes on Oct.29, the leading news outlet obtained a leaked document which detailed Binance’s strategy for its US operations. The leaked presentation contained in the document outlines that the crypto exchange has intended to set up Binance.US as a “Tai Chi entity” to shield its main operations from regulatory enforcement.

Castillo said the Tai Chi document was allegedly created by a former Binance employee named Harry Zhou.

According to Michael Castillo, the author of the Forbes article:

“While the then-unnamed entity set up operations in the United States to distract regulators with feigned interest in compliance, measures would be put in place to move revenue in the form of licensing fees and more to the parent company, Binance […] All the while, potential customers would be taught how to evade geographic restrictions while technological work-arounds were put in place.”

Castillo said the Tai Chi document was allegedly created by a former Binance employee named Harry Zhou.

Less than an hour after the Forbes report was published, CZ took to Twitter to deny and explain away the report. The Binance CEO responded:

“FUD. The statements and accusations in the article are incorrect. The whole article hinges on a 3rd party document. The said document was not produced by a @Binance employee (current or ex). Anyone can produce a “strategy document”, but it does not mean Binance follows them.”

In a series of Tweets, CZ argued that Binance has always operated within the boundaries of the law, and cited the fact that Binance has opened exchanges across the globe and said, “with proper licensing and applications.”

The Binance CEO said, “We do not acknowledge the alleged document.” He later added that Binance.US “together with our local partners’ actions of getting registered, licensed and regulated in multiple jurisdictions prove our commitment in doing things right.”

Despite the CZ’s strong denial of the allegations, the Forbes report appears quite damning and connects the dots between the Tai Chi document from 2018 with the growth of Binance.US which launched in 2019 and now operates in over 40 states.

According to the Forbes article, the Tai Chi document outlined a strategy for the yet to be launched US Binance entity to participate in the Department of Homeland Security Cornerstone Program—which detects weaknesses in financial systems—to distract the U.S. Treasury Department’s Financial Crime Enforcement Network, or FinCEN, and Office of Foreign Assets Control, or OFAC, the Securities and Exchange Commission, or SEC, the Commodity Futures Trading Commission, or CFTC, and the New York Department of Financial Services, or NYDFS.

A representative of the Department of Homeland Security reportedly confirmed with Forbes that Binance.US did participate in the Cornerstone program, as a standard part of the process of becoming a Money Service Business, but declined to comment further.

A part of the leaked Tai Chi presentation entitled “Regulator Engagement Plans” outlined that Binance.US was expected to engage the Securities and Exchange Commission, the Commodities Futures Trading Commission,and the New York Department of Financial Services—but strangely notes that the US entity was not expected to gain approvals and repeatedly using the phrase “with no expectation of success.”

The structure of Binance.US ownership is also a point of contention. The US arm of the exchange is operated by BAM Trading Services, however, both CEO Catherine Coley and Chanpeng Zhao have stated that there are no ownership ties between BAM and Binance. The Forbes report said that the leaked document did state that BAM would license trading and wallet technology from the cryptocurrency exchange.

Binance CEO CZ has continued to deny claims on Twitter, and ended his thread stating:

“Regarding the U.S., Binance has very strong restrictions and operating procedures in place, which is why we have the segregation of Binance U.S. as a standalone marketplace.”

Coinbase and Binance.US Will Support Flare Network's Spark Token Airdrop, Ripple's XRP Price Could Dip

Major cryptocurrency exchanges Coinbase and Binance US are the latest exchanges that have announced support for the Flare Network’s upcoming Spark airdrop, which saw Ripple’s XRP token price surge briefly before once again correcting below the $0.60 resistance.

The Spark Airdrop from the Flare Network, a smart contract platform solidly backed by Ripple has been the main point of talk in the Ripple community lately with an initial scare that key exchanges including Coinbase and Binance US amongst others will not be participating.

The Flare airdrop will be taking place on the 12th of December with a total of 45 billion tokens scheduled to be distributed among the holders of XRP on a 1:1 basis. As noted by Coinbase, the eligibility for participating in the airdrop is to be an XRP coin holder.

Coinbase exchange announced in a blog post:

“If you are an eligible customer holding an XRP balance on Coinbase or Coinbase Pro on the snapshot date and time of December 12, 2020, 00:00 AM UTC, you’ll receive Spark tokens from Coinbase at a later date after the Flare network launch. The amount of Spark you’ll receive depends on how much XRP you had in your account at the snapshot time.”

The move by Binance US is also a complement to the main Binance exchange that announced its support much earlier. By the support for the much-anticipated Spark airdrop, Coinbase, and Binance US customers with the former having a total XRP locked amount of $3 billion will be able to partake in the airdrop.

Implications for the XRP Coin

The XRP coin has coasted higher in the past days with the Flare Network’s Spark token airdrop contributing to the bullish run of the coin closely associated with the payment company Ripple. According to Coingecko, XRP price has surged by 178.7% in the past one year with a corresponding growth of 149.2% in the past month.

For a coin that has been battling regulatory uncertainty with the SEC, the gains are impressive and further boosted with the news of the Spark Token airdrop as Blockchain.news reported. With XRP price currently up 1.6% in the past 24 hours, the growth momentum of the third biggest coin by market capitalization is however not a promising one in the near-term.

Source: TradingView XRP/USD

The XRP token is trading at $0.59 at time of writing, still moving sideways along the $0.60 resistance level. From the XRP-USD chart on TradingView, the XRP coin has a Relative Strength Index (RSI) of 49.83, a below neutral position that suggests that market bears are wresting control of the market and we could expect a dip in the XRP price in the short-term before the bulls return. The 20-day Moving Average is also not bullish and further supports the position that investors should be watchful in order not to be caught by surprise in the next few days as we expect Ripple’s XRP token price to dip below $0.55 before resuming its bull run.

Binance.US Preps Ripple XRP Holders for Spark Token Airdrop, Over 81,500 XRP Accounts Ready for Tomorrow’s Snapshot

Binance.US has been among the last ones to express support for Flare Networks’ Spark token airdrop, but the US-based cryptocurrency arm of Binance has been all over it since the announcement.

Depending on the cryptocurrency exchange that XRP holders have used to lock in their XRP funds in preparation for the free Spark token giveaway, procedures vary slightly.

On Binance.US, XRP deposits and withdrawals will be suspended on December 11 at 5 pm EST so that the funds could be prepared for the Ripple-funded Flare Networks’ snapshot, which will happen on December 12. Flare Networks, a smart contract utility fork of Ripple, has hosted the cryptocurrency giveaway, as a way to promote FLR tokens, and this will greatly benefit Ripple XRP holders.

XRP holders will receive free Spark tokens on a 1:1 ratio with their XRP funds. With the upcoming snapshot, Flare Networks will be able to keep a record and track how much XRP a given investor holds in order to distribute Spark (FLR) tokens to Ripple holders at a later date. In order to be eligible for the cryptocurrency giveaway, the XRP held on Binance.US needs to be above 10 XRP. Per Binance.US’ specifications:

“Balances above 10 XRP held on BinanceUS at the time of the snapshot will be eligible. You MUST include the Address + TAG when sending XRP to BinanceUS. Failing to do so may result in XRP not arriving on time.”

XRP locked and loaded for Spark token airdrop

At the time of writing, more than 81,500 XRP accounts have been prepared for the Spark token airdrop, which will see 45 billion free FLR tokens distributed to XRP holders, with the exception of Ripple Labs.

The total amount of XRP running on the prepared accounts translates to more than 17.5 billion XRP, and that number is likely going to go up with last-minute deposits.

With the upcoming Spark token launch, Ripple’s XRP price is predicted by market experts to rise. Currently, it is trading in the red, following Bitcoin’s movement. The mainstream cryptocurrency has plunged from its highs above $19,000 to around $17,500, dragging altcoin prices down along with it.

In the last 24 hours, XRP price has been trading down by a near 4%, but with Spark token’s airdrop tomorrow, the price action may be salvaged and reach higher.

Former US Currency Comptroller Brian Brooks Hired as Next CEO of Binance.US

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Brian Brooks, a former top US banking regulator, will become the new Chief Executive Officer of Binance.US, the US affiliate of overseas cryptocurrency exchange Binance Holdings Limited.

In an interview, Brooks confirmed that he would begin the new job on May 1. The current CEO at Binance.US, Catherine Coley, will leave the firm by the start of May.

Brooks stated that his priorities at Binance.US would include reinforcing the crypto exchange’s commitment to regulatory compliance and making it a strong competitor to Coinbase. He said: “I wouldn’t have taken this job if I didn’t have a strong commitment from the board to lead a strong compliance program.”

Brooks, the former acting head of the Office of The Comptroller of The Currency under the Trump administration, is regarded as the “Crypto Comptroller” on social media, referring to his friendly attitude towards cryptocurrencies.

Under his leadership at the Office of The Comptroller of The Currency (OCC), Brooks introduced guidance clarifying that federally chartered banks can offer crypto custody services and use stablecoins to facilitate payment activities. The landmark announcement assisted in making it easier for traditional institutions to get into cryptocurrency.

Brooks worked at the OCC, a unit of the Treasury Department, as the acting head of comptroller for eight months from May 2020 to January 2021. Before he joined the OCC, he worked at Coinbase Global Inc. as the chief legal officer. In the past, he also worked as a general counsel of mortgage finance giant Fannie Mae.

Binance was founded in 2017 in China and later moved its offices to Malta and Japan. The overseas crypto exchange launched its US crypto branch, Binance.US, in 2019 to allow the firm to legally serve US customers. Binance exchange blocks US citizens to avoid facing regulatory difficulties with US regulators.

Why Crypto Firms Targeting Ex-Regulators

In recent months, cryptocurrency firms have hired many former government officials to not only seek mainstream acceptance but also to strengthen their compliance game. Such kinds of hires could assist crypto exchanges in navigating potential pitfalls in the emerging US regulatory framework for cryptocurrencies.

Last month, Coinbase hired Brett Redfearn, the former high-ranking director from the US Securities and Exchange Commission (SEC), to run its capital-markets division. Also last month, One River crypto asset management company hired Jay Clayton, the former SEC chairman, to join the academic and regulatory advisory council at the company.

Also last month, Binance main oversees crypto exchange hired Max Baucaus, the former Democratic senator from Montana and US ambassador to China, as a policy and government-relations adviser.

This month, BlockFi crypto company hired Christopher Giancarlo, the former Commodity Futures Trading Commission chairman, to join the company’s board of directors.

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Image source: https://www.wsj.com/articles/cryptocurrency-giant-binance-hires-former-top-bank-regulator-11618912800

Binance.US CEO Brian Brooks Steps Down, Cites Strategic Differences with Colleagues

Brian Brooks announced in his Twitter account that he has resigned from Binance.US CEO just after taking the managing position four months ago.

On Friday, August 6, Brian Brooks tweeted that he resigned because of “differences over the strategic direction” between him and his colleagues at Binance Group:

“Letting you all know that I have resigned as CEO of Binance-US…. I wish my former colleagues much success. Exciting new things to come!”

Binance CEO Changpeng Zhao (Binance.US chairman) talked about the development and said he is “confident in Binance.US’ business and its commitment to serve its customers.” Zhao stated that Brook’s departure would not affect Binance.US customers in any way:

“Brian’s work for Binance.US has been invaluable, and we hope he will continue to be an integral part of the crypto industry’s growth, advocating for regulations that move our industry forward. We wish him the very best in his future endeavours.”

Zhao did not say why Brooks left the group, and even Brooks did not explain the specific reason. So far, Binace.US has not elaborated on any successor or an interim expert to replace Brooks.

Binance Facing Increasing Scrutiny

Brooks’ departure, together with the departure of Ricardo Da Ros, director of Binance Brazil, raise more questions as regulators crack down on Binance, the world’s largest crypto exchange in the world, has intensified.

On Wednesday, July 14, Mr. Ricardo Da Ros announced his resignation as a director of Binance Brazil after serving the position for six months at the firm. Da Ros stated that he could not accomplish what he wanted within the first six months, so he departed from the company.

Brooks and Da Ros have resigned when regulators in the UK, Thailand, Italy, Japan, Germany, and Hong Kong have cracked down on Binance because of worries over investor protection. Financial regulators worldwide have raised concerns that the boom in crypto assets is aiding money laundering and increasing systemic risks.

Binance.US Appoints Joshua Sroge As Interim CEO Following Brian Brooks’ Departure

Binance.US, the American division of the world’s largest cryptocurrency exchange in terms of daily trading volume, has appointed Joshua Sroge, the company’s CFO, as the interim CEO.

The appointment comes after the former Binance.US CEO, Brian Books, was abruptly reassigned from his role.

On August 6, Mr. Brooks, the former acting head of the Office of The Comptroller of The Currency, departed from his CEO role at Binance.US after just four months of taking the job.

Earlier this month, Mr. Brooks, the former Chief Legal Officer at Coinbase crypto exchange, tweeted about his decision to step down as Binance.US CEO, citing “differences over the strategic direction” with his colleagues at the company and wished them much success at work.

Sroge joined Binance.US after five years as CFO at Firestone, a management consultancy firm that offers financial and strategic expertise to businesses. Before working at Firestone, Sroge worked as the Chief Accounting Officer at Swiss cryptocurrency firm Shapeshift, which grew its employees from 15 to 115 during his tenure.

Sroge, the longest-serving employee at Binance.US, took over the role of CFO at the firm in January 2020. The board has picked him to lead the company until a permanent CEO is named.

Taming the Crypto Giant

Mr. Brooks’ resignation came when regulators across the world have been scrutinising Binance’s operations.

Binance is the world’s largest crypto exchange with twenty-four-hour trading volumes of approximately $19.3 billion, dwarfing its competitors.

Despite its success, Binance has come under increasing regulatory scrutiny in recent months as global regulators in nations such as Malaysia, Thailand, Japan, the UK, the US and others have initiated regulatory investigations or banned its operations altogether.

Last month, Italy joined the long list of nations warning Binance about its lack of regulation. In late June, the U.K’s financial regulator, the Financial Conduct Authority (FCA), banned Binance from undertaking any regulated activities.

In the United States, Binance, which hosts about 13.5 million active users, has been facing investigation by the CFTC (Commodity Futures Trading Commission) concerning whether its users’ trade derivatives despite CFTC regulations. In May, the Internal Revenue Service and the Department of Justice started investigating Binance for money laundering.

Binance.US Intends to Launch IPO in 2023

The chances that Binance.US, the American arm of the Binance exchange, the largest in the world by trading volume, will be making its grand entry as a publicly-traded company through an IPO in 2023 are high.

In a recent interview to Binance Chief Executive Officer Changpeng Zhao by online media The Information, Binance.US is likely going to follow in the footsteps of Coinbase Global, the first crypto trading platform to go public via a direct listing in the US.

According to Zhao, popularly known on social networks as ‘CZ’, the firm’s US arm has an advantage over Coinbase as its transactions costs are about 5 times cheaper. “The users using Binance.US pay about one-fifth of the fees that they pay on Coinbase – so it’s about five times cheaper,” he said.

Going public is crucial to most companies and even marks an unprecedented milestone for firms like crypto exchanges. In the broad preparation for the move to conduct an Initial Public Offering (IPO), CZ noted that the US arm is on track to raise funds from investors, a move that he noted will reduce his influence on the board. The IPO plans are clearly outlined to follow the fundraising event, coming as early as the next two months.

“If the business can grow consistently over the next three years, then three years should be sufficient for an IPO, but if there’s a prolonged bear market for, I don’t know, maybe three or five years, then it may be a little bit longer,”

In recent times, the parent company has come under fire from regulators worldwide, including Malaysia, Germany, Japan, Hong Kong, and Singapore. While many claim Binance is operating illegally, the exchange has clarified its future plans to work with regulators in its bid to shift its operations from a tech startup to a fintech hub.

With the departure of Brian Brooks as the CEO of the US branch lately, CZ noted that a replacement amongst the firm’s senior staff might be confirmed in the coming weeks.

Binance.US Appoints Ant Group Executive to Succeed Former CEO Brian Brooks

Binance.US has announced that it has hired Brian Shroder as president and appointed him as the board member.

In the new role, Shroder will oversee the firm’s fundraising, strategy and execution, corporate and business development, and manage the company’s HR, legal, and product and technology functions.

Shroder comes to Binance.U.S, with a solid background in fintech. In the past, he worked at Ant Group, the firm behind the mobile payment app Alipay, as the head of its Southeast Asia operations. During that time, Shroder was in charge of expanding Alipay and other Ant Pay services across the region. Before that, Shroder worked at Uber Technologies Inc in the Asia office as head of the strategy and business development.

The appointment of Shroder, a Harvard MBA who kept a low profile while serving senior functions at Ant and Uber in Asia, seems to be an effort by Binance.US to ramp up its operations. The appointment is a clever approach by the exchange to bring in an executive with experience in doing business in Asia and someone with the ability to face off competition in the US market, with companies such FTX aggressively winning market share.

Binance.US is an independent firm but is completely linked to its relationships with the Binance Group, a company with deep roots and leadership in Asia. Shroder’s experience makes him fit to navigate this business culture while building an increasingly regulated business in the US.

Shroder talked about his appointment and said that his experience at fast-growing firms would help him bolster Binance.US toward its plans to go public. He believes that the company has all the necessary resources to become the largest and most successful crypto exchange in the US.

Considering Going Public

The move of Binance.US to hire Brian Shroder comes one month after former CEO Brian Brooks was abruptly reassigned from the exchange after just three months on the role.

In the meantime, the operations of Binance.US is being led by an interim CEO, Joshua Sroge.

Shroder’s coming is set to help the exchange prepare for its initial public offering expected within the next three years, depending on business growth.

Earlier this month, the exchange announced plans to go public, with the founder Changpeng Zhao stating that Binance.US is about to close a huge private fundraising round in the next two months that should reduce his control of the board. He said that after Binance.US plans to conduct an IPO by 2024.

Zhao insisted that despite ongoing pressure from regulators worldwide, business operations are running smoothly in the US now that the crypto exchange has put down a regulatory anchor.

Binance.US was launched in 2019 following a suspension of crypto services associated with its parent company Binance Group to US customers – a move to ensure complete compliance with agencies like CFTC and SEC.

Binance beefed up internal regulation through the establishment of Binance.US and is now able to protect its access to the US crypto markets as it can adjust its exchange operations to meet the specific requirements imposed by federal regulators.

Binance.US Tops its Valuation to $4.5b Stirred by $200m in Seed Raise

Binance.US, the subsidiary of Binance exchange in the United States, has raised $200 million in a seed funding round that has given the company a pre-money valuation of $4.5 billion.

As announced by the firm, the new capital injection will enhance the technological capabilities of its spot trading platform, develop a suite of new products and services to be introduced in the near term, and invest in marketing and consumer education initiatives.

The funding round completed by Binance.US saw participation from external investors for the very first time. Investors who backed the company include RRE Ventures, Foundation Capital, Original Capital, VanEck, and Circle Ventures, among others. Mission-driven firms focused on diversity, equity, and inclusion, such as Gaingels and Gold House, also joined the round.

The funding round is happening under Shroder’s watch is a testament to the company’s readiness to engage local and foreign investors with good stakes in the industry.

“In under three years, Binance.US has grown into a profitable business that is not only one of the largest and most technologically advanced digital asset exchanges in the United States, but in the world,” Shroder said in a statement, “From this position of strength, and with an eye toward continuing our rapid ascent alongside the ascent of the crypto industry at large, we are pleased to close our first financing round. This funding and valuation validate the strength of Binance.US’s business today, as well as our long-term growth prospects, and will enable us to continue to make our spot trading platform the best it can be while rolling out an ambitious product roadmap.”

Binance.US is the most recognized entity of the bigger Binance brand and an expression of the company’s grand plans to gain the affection of American market regulators. Since its inception, the exchange had made a number of appointments, including Brian Brooks, the former Comptroller of the Currency, who left the firm after a short stint before Brian Shroder assumed office as the exchange’s Chief Executive Officer.

Preparing for Public Listing

In a move similar to what Coinbase Global Inc did back in April last year, Binance.US has also joined a host of nations looking to make their public debut through IPO offerings. While the plans are still somewhat hazy, this funding round may be Binance.US’s way of watering the ground in anticipation of bigger backing from investors across the board shortly.

Gulf Energy Invests in Binance.US as Both Aim to Float a Crypto Exchange

In a letter addressed to the president of the Stock Exchange of Thailand, the country’s power generation firm Gulf Energy Development Public Company Limited unveiled its investment in Binance.US through its Hong Kong-based subsidiary, Gulf International Investment Limited.

The investment was made following the issuance of Series Seed Preferred Stock by BAM Trading Services Inc, the startup operating the Binance.US platform. The strategic investment size was not disclosed, but the partners were very clear on the way in which the funds will be utilized to achieve both the firm’s long-term visions.

“Binance.US will use the proceeds from the seed funding to expand headcount, launch ROI based marketing efforts, expand its product portfolio and make potential future acquisitions before its planned initial public offering (IPO) in 2-3 years. As such, the investment in Binance.US not only provides an opportunity for the Company to participate in one of the fastest user scale-up exchanges in the world but also realizes potential higher investment value post-Binance.US’ IPO,” the announcement reads.

In a separate notice, Gulf Energy also unveiled the acquisition of BNB Tokens as a means to gain access to the Binance ecosystem.

As the highlight of the dual announcement shared on Monday, both firms unveiled the plans to float a Joint Venture with the goal of launching a crypto exchange. The plan is slated to be actualized by the second quarter of the year, and both are notably ready to pursue relevant licenses in a bid to operate under the confines of the law.

“The company believes that this multi-level cooperation with Binance, which is the global leader in blockchain infrastructure technology, is aligned with the Company’s target to be the leader in digital infrastructure while providing further opportunities for the Company to expand into other digital asset-related initiatives in the future,” the Gulf Energy filing detailed.

The Gulf Energy backing comes following the $200 million funding round that positioned the firm at a price valuation of $4.5 billion.