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Binance is facing various allegations from the US Commodity Futures Trading Commission (CFTC) alleging misconduct among the company’s executives.

Binance uses Signal’s auto-delete feature

On March 27, the CFTC sued major crypto exchange Binance. Binance’s accusations primarily suggest that Binance violated regulations to serve US-based customers, but these allegations also describe other improprieties. .

In particular, the CFTC highlighted the fact that Binance executives used the messaging application Signal to communicate. He added that the application’s auto-delete feature allows executives to delete records of discussions of incriminating activity.

Regulators claimed that Binance used Signal for internal and customer communications. Specifically, the CFTC said its US regulatory discussions were conducted via signals. This is a practice “mandated” by his CEO of Binance, Chang Pong Zhao, according to Binance’s former compliance officer, Samuel Lim.

Compliance officer knew of unauthorized use

The CFTC also highlighted the link between Binance and illegal activity.

Specifically, the CFTC said that around February 2019, Binance received information about transactions related to the Islamic terrorist group Hamas. Soon after, Lim confirmed the fact in a message, stating that terrorist groups often send “small sums.” become money laundering.

In 2020, Lim commented on funding from Russians and other users, stating: Another executive said: [two] eye. “

Lim also allowed customers whose transactions were linked to illegal activities to continue using Binance with new accounts. Elsewhere, Lim discouraged closing high-risk accounts, stating: [Changpeng Zhao]eyes. ”

Binance explained to users how to use VPN

Another section of the CFTC filing suggests that Binance has told its customers how to use a virtual private network (VPN) to circumvent geofencing measures.

Binance stopped serving US customers in 2019, but posted a VPN guide shortly afterward. It says it has notified users that they can “unlock restricted sites.”

The advice seems to have been intentional. In a conversation log, Lim said he wanted users to know how Changpeng Zhao used his VPN to access Binance. He also suggested that third parties could instruct users to access his VPN, even though Binance itself was unable to do so.

In a separate conversation, Lim acknowledged that changing a US user’s status to non-US is a scam, but said Binance could encourage users to use non-KYC accounts or VPNs.

Binance refutes these allegations in a statement today, saying it blocks U.S. customers based not only on their IP address, which is the only block a VPN can bypass, but also on their mobile phone service provider, credit card location, and KYC data. said.

Binance has also addressed employee trading on its own platform, but otherwise has yet to address most of the CFTC’s concerns.

By Jules

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