Forbes: Leaked document details Binance plan to avoid U.S. regulatory scrutiny

Forbes published a new report Thursday based on what it said is a leaked document detailing crypto exchange Binance's efforts to avoid the scrutiny of U.S. regulators.

Forbes' story notes that Binance "conceived of an elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States." Its source is a 2018 document, which is not publicly available at time of writing, called "the Tai Chi document," which Forbes reports contains a roadmap for using a U.S.-based company — which later became Binance.US. 

As Forbes summarizes:

"The leaked Tai Chi document, a slideshow believed to have been seen by senior Binance executives, is a strategic plan to execute a bait and switch. While the then-unnamed entity set up operations in the United States to distract regulators with feigned interest in compliance, measures would be put in place to move revenue in the form of licensing fees and more to the parent company, Binance. All the while, potential customers would be taught how to evade geographic restrictions while technological work-arounds were put in place."

In response to the report's publication, Binance CEO Changpeng Zhao wrote: "FUD. The statements and accusations in the article are incorrect. The whole article hinges on a 3rd party document. The said document was not produced by a @Binance employee (current or ex). Anyone can produce a “strategy document”, but it does not mean Binance follows them."

"Binance has always operated within the boundaries of the law, and this is evidenced by the many international exchanges we’ve helped launch in countries like the US, SG, JE, UK, KR and TR," he went on to write. "In contrast to the article, Binance has always approached every location with proper licensing and applications."

Looking ahead, Forbes wrote that it "learned that the Tai Chi document is currently circulating among law firms, accounting firms and others associated with Binance, and there is speculation that the FBI and the IRS may be investigating."