Behind Closed Doors: Binance’s VIPs Get Early Warning
In a surprising revelation, Bloomberg reported that Binance discreetly shared details of its upcoming $4.3 billion settlement with US authorities to its VIP traders. This disclosure occurred during a private dinner in Singapore two months before the official settlement.
The private event, attended by some of Binance’s most significant traders, served as a reassurance that the crypto exchange would emerge “resilient” despite the legal challenges it faced. This move highlights the close relationship Binance maintained with its VIP customers.
CNBC shed further light on the privileges extended to Binance’s VIP users. According to the US Treasury’s Financial Crimes Enforcement Network, these select traders received notifications from Binance if they were under law enforcement scrutiny. This effectively positioned Binance as an informant for its high-tier clients.
Binance’s CEO, Changpeng Zhao, stepped down following his guilty plea to criminal charges in the US, marking the conclusion of a multi-year investigation. The VIP team at Binance was reportedly instructed to subtly hint at investigations to concerned users without explicitly advising them to withdraw funds or evade legal scrutiny.
VIPs: A Crucial Part of Binance’s Revenue
Binance’s VIP customers significantly contributed to the platform’s trading volume and revenue, sometimes accounting for up to three-quarters of the total, according to FinCEN. Despite policies prohibiting US residents from trading on the platform, US users formed a substantial part of the VIP user base, generating as much as 20% of transaction fees.
To retain its US clientele, Binance reportedly encouraged users to modify Know Your Customer (KYC) documents and use VPNs to hide their actual location. VIP users, especially the top 100, were given leeway and time to create or find non-US entities to continue trading.
The FinCEN report exposes Binance’s strategies to maintain its VIP customer base while dealing with legal challenges. This raises important questions about the ethical and regulatory practices of major crypto exchanges and their commitment to compliance amid increased scrutiny from global regulators.
Hot Take: Binance’s VIPs Receive Early Warning of Settlement
In a surprising turn of events, it has been revealed that Binance shared details of its impending $4.3 billion settlement with US authorities with its VIP traders before the official announcement. This disclosure occurred during a private dinner in Singapore, highlighting the close relationship between Binance and its VIP customers.
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