This information surfaces through a comprehensive Twitter thread by Adam Cochran, a partner at MetaCartel Ventures DAO, elaborating on evidence presented in the ongoing SEC case against the platform.
A Glimpse into the Compliance Quagmire
Cochran’s Twitter exposé includes conversations between Sam Lin, Binance’s former compliance lead, and Alvin, former head of Business Development.
In one instance, Lin advises Alvin to quickly convert his BNB (Binance Coin) bonus into USDT (Tether), describing the compliance segment of the company as a “sinking ship.”
The chats reveal Lin’s refusal to vouch for OFAC (Office of Foreign Assets Control) compliance at Binance, despite offers of a double salary.
Notably, Lin suggested that key figures in Binance, including CFO Wei Zhou and CEO CZ, were well aware of the reasons behind the hesitations around OFAC sign-offs.
“We are not clean,” Lin stressed, underlining that he hadn’t seen anything to prove otherwise. Furthermore, the conversations discussed how customer service was allegedly teaching users to bypass procedures and how business priorities were reportedly pushing compliance training to the backseat.
“Survive for Two Years and Then…” – The Binance Strategy?
According to the thread, the broader strategy for Binance’s native BNB coin was merely to “survive for two years and then…” This uncompleted sentence, as Cochran suggests, hints at an exit strategy.
The thread also presents a translation of a recording where CZ discusses the 2019 blockage of US users, subtly suggesting ways to bring them back using foreign Know Your Customer (KYC) processes and ignoring IP addresses.
In addition, the launch of Binance US sparked internal conversations about leaving a backdoor for US users through purchased KYCs and VPNs.
In another startling revelation, Lin implied a special arrangement for ‘whales’ or big traders to onboard via the US exchange, but trade through the company’s international platform. He suggested that CZ would “definitely agree to this” and that the company “always has a way for whales.”
The thread suggests a significant amount of withdrawals from Binance US came from its international counterpart. It also points to unexplained internal conversations about converting USD into BUSD, Binance’s stablecoin.
This is just the tip of the iceberg. As Cochran hints, there are around 80 more documents to peruse.
The unveiling of these chats has undoubtedly brought Binance into a spotlight of concern, raising questions about regulatory compliance and business ethics in the rapidly evolving world of cryptocurrencies.
You can read Cochran’s post here.