• Binance has been accused of assisting Chinese nationals to evade restrictions despite the crypto ban in the region.
• Users reportedly trade $90 billion in crypto-related assets on the exchange in a month.
• US Securities and Exchange Commission has recently filed a lawsuit against Binance for lack of disclosure, conflicts of interest, etc.
China’s Crypto Ban
In 2021, China banned financial institutions from facilitating crypto transactions and outlawed the asset class some months later. This left many Chinese nationals unable to access cryptocurrencies, leading to many people seeking other solutions such as using Binance.
Binance: $90 Billion Traded
World’s largest crypto exchange Binance is reportedly operating despite the ban as users traded $90 billion worth of cryptos in a month. The trading was primarily done via futures contracts that are tied to cryptos, which are also banned in the US. Interestingly, an internal document reveals that the exchange assists users in China to bypass restrictions by directing them to some Chinese domains before rerouting them to the platform. South Korea contributed about 13 percent shares of US$58 billion while Turkey, Vietnam, and British Virgin Islands were also contributors.
Binance Accused of Assisting Evasion
Current and former employees of Binance have accused it of assisting Chinese nationals to evade restrictions despite the crypto ban in the region. Employees often discuss how important operations are for China and there are claims that investigations team works with Chinese authorities to prevent criminal activities among about 900,000 active users in China.
SEC Lawsuit Against Binance
The US Securities and Exchange Commission (SEC) has recently filed a lawsuit against Binance for lack SEC Chair Gary Gensler commented: Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated misrepresentations regarding money laundering risks associated with their business practices.“
Questions Raised Regarding Real Ban Status
The reports have raised questions about whether or not China actually bans cryptocurrencies or if it is just a facade given that one can easily access them through different channels like Binance. It would appear that more investigation into this matter is required before any conclusions can be drawn regarding its real status within the country’s borders.