How Binance Tried to Dodge US Regulations

Internal sources reveal how Binance tried to dodge US regulations.

Internal sources reveal how Binance tried to dodge US regulations. Even the current SEC head Gary Gensler was reportedly drawn into this.

Just a month ago, crypto exchange Binance agreed to pay fines to settle ongoing U.S. regulatory investigations into its business.

From a Wall Street Journal report it appears the company had been working to evade regulation in the U.S. since some time. According to the report, in 2019 the company had already tried to recruit the current SEC chief Gary Gensler as legal counsel. Gensler was teaching at the Massachusetts Institute of Technology (MIT).

Gensler declined, but in the process shared "licensing strategies" with the crypto exchange, per the report. Furthermore, internal group chats and interviews with former employees showed how much uncertainty the Binance team felt about U.S. authorities.

There were several organizational missteps that endangered the legal separation of the U.S. offshoot from the global parent company. As a result, it was reportedly panic in management group chats.

Consequently, the company's management held an internal presentation titled: "How Binance could shield itself from U.S. authorities," the report says. This included the suggestion that U.S. customers should use a VPN (virtual private network, used to hide a customer's identity).

Former employees also criticized the management's lax stance in the company's early days. Binance seems to be pursuing this to this day. Only recently did the company admit mistakes in how it safeguarded customer funds.