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Binance has stirred some controversy, after Forbes reported on October 29 that the exchange had conducted an “elaborate scheme” to evade regulation.
- Forbes reports that senior executives of Binance devised an “elaborate corporate structure..to intentionally deceive regulators and surreptitiously profit from crypto investors”, according to a document that the media outlet had obtained
- It points to a US company named “Tai Chi entity”, allegedly a company that is used by BINANCE to circumvent US regulation
- A slideshow on this Tai Chi company reportedly talked about how to execute a bait and switch -- following compliance standards but gaining more revenue in licensing fees and diverting more of the earnings to parent company Binance
- Additionally, the document talks about “distracting” US regulators and the use of a VPN to work around the Securities and Exchange Commission (SEC) and New York State Department of Financial Services (NYDFS)
- CEO Changpeng Zhao responded to the report, calling it inaccurate, saying that Binance does not acknowledge the document and that it works within regulations
- Forbes has said that it would not reveal the source of the document, which was first presented to Zhao in Q4 2018
