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US Senators and regulators have accused Binance of illegal financial activity as they demand a response from the world’s largest crypto exchange on money laundering.
In recent times, Binance has seen itself under stricter scrutiny from US senators and regulators. However, users are now shifting from Binance to other DEX (Decentralised Exchanges) as it is becoming a major suspect to regulatory warnings in several countries. While the BUSD trouble is still in progress, law authorities have accused Binance of being a “hotbed of illegal financial activity”, answers are being demanded from the global exchange on numerous issues, including the treatment of users from the United States, the finances and controls for stopping money laundering activities.
The SEC (Securities and Exchange Commission) has reportedly started a probe into the exchange’s stablecoin BUSD (Binance USD). The SEC wants to ensure that the BUSD is backed by enough reserves.
According to Wall Street Journal, Binance has been targeted by a bipartisan group of three US senators that require complete information regarding Binance’s money laundering controls. US senators have accused the exchange of facilitating “illegal financial activity” and have pressed for transparency on the matter.
According to the US Senators, Sens. Elizabeth Warren, Chris Van Hollen and Roger Marshall, “Binance and its related entities have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public.”
The US Senators group issued a letter to Binance addressing the CEO Changpeng Zhao “CZ” to provide information related to the organisation’s balance sheet since 2017. They also requested internal protocol information, and any exchanges regarding Zhao’s reported attempts to restrict compliance measures. March 16th, 2023 is the set deadline for Binance by the Senators to respond to their request.
The ongoing scrutiny is a turning point for Binance as it has faced criticism in the past over its regulatory compliance, but the company previously weathered all storms and continued to grow.
However, the latest accusations are a major hit to the company. The CEO has been forced to publicly defend the exchange’s reputation, insisting that Binance is compliant with all regulatory obligations and is committed to working with all legal authorities globally.