Binance Asks Prime Brokers To Step Up Audits To Prevent US Investors

According to Bloomberg, after pleading guilty last year and being fined $4.3 billion for violations of U.S. anti-money laundering and sanctions laws, Binance has asked its prime brokers such as FalconX and Hidden Road to implement stricter vetting measures on customers to prevent U.S. investors from using the world’s largest cryptocurrency trading platform.

Since pleading guilty in November, Binance has told these prime brokers that serve institutional traders to obtain more information from their clients, including asking for office addresses and the locations of employees and founders, and requesting responses, according to people familiar with the matter. The applicant signs a statement confirming the accuracy of the answers.

The Department of Justice criticized Binance in a November statement, saying it had targeted U.S. customers, particularly high-volume traders who could add liquidity to the exchange, while refusing to comply with U.S. laws. In an effort to rebuild its reputation and market share, Binance co-founder CZ stepped down as CEO following a plea deal last year, with Richard Teng taking over.

While Binance’s market share of global spot crypto trading volume fell from nearly 60% to about 30% last year, the platform’s market share has recovered to about 40% as Bitcoin prices have surged over the past 12 months.

Related Articles