April 28, 2023
By Anjali Kochhar
Binance.US, the digital-asset platform owned by crypto billionaire Changpeng “CZ” Zhao that was created to serve American clients, has a significant tech workforce in China.
Binance.US currently has about 100 contract workers in Shanghai, mostly in engineering and product roles, according to Bloomberg sources. For at least a year there has been a plan to relocate some of the workers to North America, though progress has been slow, they said.
The lawsuit filed by the Commodity Futures Trading Commission against Binance, the world’s largest cryptocurrency exchange owned by CZ Zhao, accuses the company of blurring the lines between Binance.US and Binance Holdings. According to the CFTC, Binance ran a “deliberately opaque common enterprise” that should have been registered with the CFTC but was not.
The lawsuit also seeks penalties and permanent trading and registration bans against Zhao and Binance. The CFTC alleges that Binance and Zhao violated US laws by soliciting American users and using Binance.US to identify large local clients for the global site.
The complaint does not mention the contract workers in Shanghai, and it does not raise any concerns regarding Binance’s past or current operations in China, which are legal and represent a minority of its workforce.
Former senior US government officials interviewed by Bloomberg News suggest that any connections to the country where Binance was originally established might prompt inquiries by US authorities.
“Binance.US has a global workforce of more than 500 employees and contractors that serve our US-based customers,” a Binance.US spokesperson said in a statement. “Binance.US’s experienced, independent leadership team controls the direction of the company, its assets, and the supervision of customer accounts and data, all of which is stored on the Amazon Web Services platform based in Richmond, Virginia.”
Binance.US was established in 2019, utilizing resources and personnel from the international platform, which had operations in China at that time, as per an anonymous source close to the global exchange.
Some of the Shanghai-based workers gradually moved to the US site, while Binance.US also continued to recruit new contractors in the city, according to individuals familiar with Binance.US.
Binance was started by CZ Zhao in China roughly six years ago and had workers there, even after the Chinese government banned crypto exchanges. Zhao later sought bases in more crypto-friendly countries like Malta and Japan but retained some employees in China.
Despite this, Zhao has attempted to dispel any notion that his company maintains ties to China, which banned all crypto transactions in 2021. Zhao stated in a blog post last year that by late 2018, most Binance employees had left China, and only a few customer-service agents remained.
However, the presence of the China-based tech team may have raised concerns for Binance.US if it had proceeded with its proposed acquisition of bankrupt American crypto brokerage Voyager Digital Ltd, according to Jerry Comizio, a former official at the Treasury Department and the SEC who is now an adjunct law professor at American University.
The deal could have been subject to review by the Committee on Foreign Investment in the United States due to the involvement of foreign investment, according to a filing with the bankruptcy court from the Justice Department, which had other objections to the deal.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.