Binance CEO Changpeng Zhao (CZ) has reportedly cautioned Binance employees about the importance of their internal communications, following a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) earlier this week. This move comes in response to the SEC’s release of chat logs between Binance employees, which have raised concerns regarding the company’s compliance practices and alleged unauthorized securities exchange activities.
Binance’s staff internal chat leaked
According to a translated copy of a memo obtained by Odaily Planet Daily, CZ emphasized the potential consequences of employees’ words being used against them in a legal context or being leaked online. The leaked chat logs featured discussions between employees, including former compliance lead “Sam Lim” and Head of Business Development “Alvin,” wherein they discussed “dumping” BNB tokens before their value declined. Additionally, they candidly admitted to participating in what the SEC alleges is an unlicensed securities exchange.
The chat logs also revealed Lim explaining a “special arrangement” through which an entity could become a client of Binance US but secretly trade on Binance international exchange, with CZ’s purported agreement. In response to these revelations, CZ characterized the chat logs as a mere “complaint” from two individuals but acknowledged the damage caused to the company’s reputation. He further warned employees that the SEC may request access to the exchange’s complete chat history as part of their investigation.
CZ clarified that he does not actively monitor employee conversations and claimed to be seeing the chat logs for the first time. He expressed his belief that the SEC’s use of the chat logs as evidence was unwarranted and stated that legal professionals would handle the matter accordingly.
CZ denies wrongdoing amid SEC crackdown
The translated memo obtained by Odaily also revealed CZ’s message to employees who may be dissatisfied with their work at Binance. He urged them to seriously consider alternative career options. This statement raises questions about potential internal challenges faced by the company in light of the recent lawsuit.
In response to the SEC’s allegations that Binance redirected billions of dollars in customer funds to CZ’s company, Merit Peak, the CEO vehemently denied any wrongdoing. CZ reassured the public that all user funds are accounted for and clarified that funds had never been transferred from the Binance.US platform without user-initiated withdrawals.
As Binance faces legal scrutiny and attempts to address the fallout from the leaked chat logs, the company’s reputation and compliance practices will be under intense scrutiny. The SEC’s investigation and the subsequent actions taken by Binance will likely have a significant impact on the future of the exchange and its employees.
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