Binance’s Chinese Roots Raise Regulatory Eyebrow
One of the largest exchanges in the world Binance is treated with a pinch of suspicion by U.S. authorities, notably the Committee on Foreign Investment in the United States (CFIUS).
The CFIUS is the watchdog in charge of reviewing purchase operations by overseas entities, – and it is not particularly happy with Binance’s potential acquisition of the crypto lender Voyager Digital’s assets at a bankruptcy auction. Mainly because this move may pose a national security risk as Changpeng Zhao, the founder and CEO of Binance, is a China-born Canadian citizen.
Washington has been wary of all Chinese companies and their influence in the country for years. As a result, the CFIUS asked Binance to add money on top of its Voyager Digital bid as insurance if the watchdog decides to carry out a review, which could delay the potential acquisition.
The exchange insists that Binance does not pose any risk to the country.
“Binance has made investments into countless American companies both directly and through Binance Labs,” Patrick Hillmann, the company’s chief communications officer, said Friday. “Binance has never been the subject of an inquiry officially or unofficially by CFIUS.”
He added: “Binance is a Canadian company owned wholly by a Canadian citizen. The xenophobia underlying the very nature of us receiving [a question about CFIUS concerns] is almost as shocking as the violation of confidentiality” represented by information leaking from the bankruptcy auction.
Later, another company’s spokesperson added that Binance is an "international company," not a Canadian one.
Voyager Digital filed for bankruptcy in July. The highest bid for acquiring it currently belongs to FTX. Yet, more bids are expected to come in soon.
Previously, Gagarin News reported that Binance will have to prove that it’s not a Ponzi scheme.
It was also accused of becoming a hotbed of crime.
