Explained: Binance’s confusing corporate structure

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Earlier this month, Changpeng Zhao (CZ), Binance’s CEO published an article on Binance.com accusing journalists of racist bias for calling his organization a Chinese company. His article came in response to a question made to Binance’s chief communication officer on Twitter by journalist Jacob Silverman who asked him who is Guangying Chen? Apparently, this question made CZ very uncomfortable.

Binance has always been very opaque about its ownership structures and official jurisdiction, and its history is still a mystery. For some time, journalists have been trying to understand who owns Binance and where it’s located, but a leaked official US government report once claimed that Binance has tried to hide its ownership structure and main jurisdiction so as to avoid scrutiny and effective regulation.

In fact, Binance is reported to have availed itself of a more than year-long grace period from KYC regulations as it registered its companies in Malta until October 2019 before legislation was introduced. Binance is also reported to have allowed up to $2.35 billion in illicit funds to pass through its exchange from 2017 to 2021.

A look at Binance’s official documents in Malta and the UK confirms that the ownership system is hidden behind a web of different companies linked together by a distributed shareholding by different owners. However, all roads lead to CZ. Earlier this year, Bloomberg revealed for the first time that CZ owns up to 90% of Binance’s shares.

CZ claimed in his article that Guangying Chen is a Chinese national who stood as his startup’s Bijie Tech legal representative in China given that China has strict restrictions on the foreign ownership of companies. CZ also claimed that Guangying currently has a European Union passport.

Official documents obtained from the Malta Business registry confirm CZ’s statement that Guangying Chen is a Chinese national-passport holder. She was previously based in Singapore and seems to have obtained her new foreign passport in 2021 or 2022. Protos could not confirm its country of origin.

Chen is also listed as the director of Binance Europe and Binance Marketing Services registered in Malta with Binance (Services) Holdings Limited, registered in Ireland, and CZ being the main shareholder. CZ is also the main shareholder of Binance (Services) Holdings Limited. Foreign companies registered in Malta enjoy a generous tax reimbursement if profits are paid out in dividends. 

Some Binance-registered companies also seem to be owned by CZ such as Binance Digital in the UK, while others such as Binance Ltd and Binance Markets Limited have had different majority shareholders. However, Binance holds its largest companies in secretive jurisdictions. Binance Capital Management, which Bloomberg states CZ holds majority ownership of, is registered in the British Virgin Islands, Binance Holdings is registered in the Cayman Islands, and Binance Investments Company is registered in the Seychelles.

Read more: Binance to forcibly liquidate major stablecoins — but not Tether

Forbes lists CZ as a resident in Dubai, in the United Arab Emirates which has been recently grey-listed by the Financial Action Task Force for having a reputation for money laundering and protecting financial criminals due to its lack of extradition treaties.

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