Binance vs Reuters: CZ says journalists could endanger his child

Listen to this article.

Binance chief Changpeng Zhao (CZ) has accused a Reuters journalist of threatening to place his children “in harm’s way” as the long-running war of words between the outlet and the world’s biggest crypto exchange rumbles on.

Zhao made the allegation in a blog post written in response to a number of explosive allegations made by Reuters concerning his stewardship of Binance and the company’s commitment to compliance.

In his post, CZ says he would normally address the points with the journalists themselves but feels that, in this instance, he has no choice but to put his responses directly to the community. This, he says, is because the writer in question threatened to publish information about his children — something he branded “unprincipled and intolerable.”

According to CZ, his family would be at risk due to Binance’s work with law enforcement to seize assets from criminal organizations. Similarly, he says the risks posed to his employees are why Binance is so reluctant to openly share detailed information about the locations of its offices.

Among the many claims made in Monday’s Reuters article are: 

  • That in 2018, CZ signed off a plan to create a new American exchange to “insulate” Binance from scrutiny by US authorities. The new business would deflect attention away from the main platform and act as a “regulatory inquiry clearing house.”
  • Allegations that Binance sought to dodge regulatory scrutiny by backdating a company document to avoid a review of a Binance UK unit. According to the article, CZ said, “I am fine with it.”
  • That since August last year, when Binance tightened customer checks, two Iranian crypto exchanges — Wallex and Sarmayex — have used the exchange to move crypto worth at least $29 million. This is despite US sanctions on Iran.
  • Claims of a company guide that explained Binance’s mission for new employees, prioritizing “rapid results” over in-depth research or data analysis. The guide said that employees should “make decisions by trusting their good-feel.”
  • That Zhao was obsessed with control and kept a close eye on all aspects of the business, including carrying out spot checks on employees’ time sheets.

However, CZ disputes many of these allegations. Indeed, much of the blog post is reserved for his take on Binance’s quest for compliance. The 45-year-old is keen to point out that, far from looking to dodge regulations, the company boasts more than 500 global security and compliance team members and a strict know-your-customer (KYC) policy.

He also reiterates his firm’s zero-tolerance policy on criminal activity, pointing out that, if Reuters’ figures are correct, less than 0.1% of total funds that have flowed through Binance since 2019 have been illicit.

Zhao then takes aim at claims that he’s an “overbearing” and “secretive” leader, saying, “I’m very transparent about my leadership style and every Binance employee has access to CZ’s Principles, a 6,000-word list of his values.

CZ highlights two Reuters journalists in his blog who have written several stories about the exchange.

He then goes on to address the company’s secrecy around its office locations and the compensation paid to employees. “We are careful when disclosing office locations, wearing Binance branding, or representing ourselves as Binance employees for security purposes,” he says.

“However, regulators in each jurisdiction where we operate have our local address and contact details on file and we have announced major offices in Paris and Dubai. We have also set up a special part of the Binance website specifically for Law Enforcement,” (our emphasis).

Read more: Explained: Binance’s confusing corporate structure

He rounds out his response by saying: “I’d like to reiterate my desire to A) have strong, open relationships with reporters at all outlets and, more importantly B) keep my family safe. Without assurances of B, I can’t commit to A.”

Binance vs Reuters

This is just the latest installment of the ongoing war of words between Binance and Reuters.

The outlet has previously reported that the company facilitated $2.36 billion in criminally-laundered funds, a figure cited in today’s investigation and again, repeatedly denied by Zhao. However, Protos has previously debunked Zhao’s claims that money laundering isn’t a big deal on its platform. 

Read more: FOI reveals 20% of UK crypto fraud last year relied on Binance

Binance also previously sued Forbes for defamation in regard to the Tai Chai document, which is also referenced in today’s investigation and is alleged to show Binance’s strategy for avoiding regulatory scrutiny in the US. However, Binance later dropped the lawsuit with no explanation as to why. 

For more informed news, follow us on Twitter and Google News or listen to our investigative podcast Innovated: Blockchain City.