Global cryptocurrency exchange giant Binance has reportedly sought help from brokers (from Global Binance) to tighten screening processes and remove American investors from its platform, in response to ongoing legal turmoil in the United States. This development was announced by Bloomberg today.
The initiative includes collaboration with leading prime brokers such as FalconX and Hidden Road, which cater mainly to institutional investors.
According to information from Bloomberg, these brokers are tasked with intensifying due diligence procedures, requesting comprehensive client information such as geographical locations of offices, details about founders and employees, and ensuring the accuracy of the data presented.
The move comes on the heels of Binance pleading guilty to violating the Bank Secrecy Act along with its former CEO Changpeng Zhao last year.
This admission was part of a settlement with the US Department of Justice, in which Binance agreed to pay a staggering $4.3 billion in fines over alleged money laundering, fraud and sanctions violations.
In a statement, a Binance spokesperson reiterated the company's commitment to compliance and emphasized the transparency of the standards it applies when evaluating the suitability of end users to access the platform.
According to Binance, this transparency provides clarity to businesses looking to access market-leading liquidity.
Legal troubles have not been without consequences for Binance's US operations. The exchange's American arm faced regulatory action from the Securities and Exchange Commission (SEC) last June, prompting significant downsizing efforts.
*This is not investment advice.