authorities by setting up a new American exchange. It shows that in 2018, Zhao approved a plan by lieutenants to “insulate” Binance from scrutiny by U.S. With more sources and documents at their disposal, Reuters found essentially what the Forbes piece three years earlier suggested: Binance US was designed to trick regulators and U.S. However, this early reporting by Forbes was corroborated by a much more detailed report by Reuters in October 2022. In February of this year Binance tried a different tack: they invested $200 million in Forbes’ parent company. Binance responded by suing Forbes for defamation, only to drop the lawsuit a few months later. regulators into focusing on the compliant local exchange, while the parent exchange went free to do its own business. According to this document, the Binance US exchange was a ploy to trick U.S. However, shortly after the creation of Binance.US, Forbes magazine published a report claiming that they had received a leaked document referred to as the “Tai Chi” document. Note that it is not difficult to obtain these licenses, as we previously showed in our exposé of a network of fake crypto exchanges based in Colorado. Binance.US, based in Palo Alto, is licensed as a money services business in the United States. Binance.US was described as a separate entity from Binance that was merely licensing the name and certain features from the main company. Binance, the world’s largest exchange, created Binance.US in early 2019 in response to regulatory pressure. It turns out that FTX was not the only offshore exchange to create a U.S. regulators into focusing on the smaller American company instead of turning attention to the incoming financial hurricane in the Bahamas. One might think that, perhaps, FTX.US was really just a ploy to trick U.S. However, when the end came for FTX, FTX.US met the same fate, freezing customer withdrawals and entering Chapter 11 with the rest of the FTX/Alameda network.ĭespite being U.S.-regulated and theoretically walled off from FTX, FTX.US was in reality little more than an extension of its offshore owner. FTX leadership insisted that customers of the FTX.US division would be safe even if the parent company went under. FTX.US was ostensibly held at arms length from the parent exchange. In the final days of the FTX collapse, onlookers wondered about the solvency of FTX’s U.S.-based exchange, FTX.US.
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