Binance, the world’s largest cryptocurrency exchange, reportedly hid ties to China for years despite claiming to have left the country following Beijing’s regulatory clampdown in 2017, according to internal documents cited by the Financial Times on Wednesday.  

See related story: Binance, Zhao sued by CFTC for alleged regulatory violations

Fast facts

  • Binance Chief Executive Officer Changpeng Zhao and other senior executives reportedly directed employees to conceal the company’s presence in China. The Financial Times reported that the company had a mainland office that was active until 2019 and a Chinese bank that was used for payrolls. 
  • Binance reportedly told employees in 2018 that their salaries would be disbursed via a bank in Shanghai, and in 2019, they were told to attend a tax session at an office in China.
  • The Financial Times also reported that employees were cautioned to only publicly acknowledge offices in Malta, Singapore and Uganda, while avoiding reference to other locations, including China.
  • The exchange has reportedly concealed its Chinese presence by including instructions in the onboarding documentation for new employees in China to install virtual private networks on their devices. 
  • “It is unfortunate that anonymous sources are citing ancient history (in crypto terms) and dramatically mischaracterizing events. This is not an accurate picture of Binance’s operations,” a Binance spokesperson said in a statement shared with Forkast.
  • “Binance does not operate in China nor do we have any technology, including servers or data, based in China. We strongly reject assertions to the contrary,” the spokesperson said.
  • The Financial Times said in its report that it could not determine whether Chinese offices cited in the company’s internal communications were still active. However, according to a former employee cited by the outlet, “many” of the exchange’s developers were still in the country.
  • Zhao said in a blog post published last September that Binance is not a Chinese company and has never been registered or incorporated in China. He added that only a “small number of customer service agents” remained in China by late-2018. 
  • China banned crypto exchanges from providing services in the country in 2017 and outlawed crypto trading and mining in 2021.
  • The U.S. Commodity Futures Trading Commission sued Binance on Monday over allegations that it illegally served clients in the U.S.

See related story: Binance to shut down yuan trading on C2C platform after China’s crypto ban

(Updates to add Binance response)