Legislators call on the Justice Department to stop cooperation with Binance
Peng Jinlong, chairman of the Financial Supervisory Commission, went to the Finance Committee on June 12 to report on the "process of formulating special laws on virtual assets." During the meeting, KMT legislator Wang Hongwei strongly criticized the cooperation between the Ministry of Justice and the overseas exchange Binance, and questioned that this behavior would "whitewash" Binance.
Wang Hongwei pointed out during the inquiry that Binance has been punished by law in many countries such as the United States, Canada, and India, and its suspected money laundering and fraud are even more "notorious" internationally. Even the founder of the exchange, Changpeng Zhao, was also involved in related crimes. The crime was sentenced in the United States. However, since last year, the Ministry of Justice and the Procuratorate have cooperated with Binance to hold a number of seminars on new forms of crime such as cryptocurrency. Wang Hongwei questioned whether they were helping Binance "whitewash".
In response, Jian Meihui, deputy director of the Prosecution Department of the Ministry of Justice, responded that the cooperation with Binance and other virtual asset exchanges is to obtain the cash flow and transaction information required in the case. She emphasized that such cooperation is necessary and that Binance has indeed provided the required information in some cases.
However, Wang Hongwei was quite dissatisfied with the prosecutor's explanation and pointed out that as long as you search for Binance on the Internet, you can see information related to fraud, and there are many criticisms of the Ministry of Justice's cooperation strategy. She also strongly called on the Ministry of Justice to stop cooperation with Binance and publicly questioned whether Taiwan should publicize this kind of cooperation with international fraud groups.
Why cooperate with Binance?
Legislator Wang Hongwei's fierce remarks attracted the attention of the meeting and the crypto community. However, whether Wang Hongwei's two major points of "Binance is notorious internationally" and "Taiwan stopped cooperating with Binance" are really justified? ?
Why cooperate with Binance Exchange?
Although the current methods of cryptocurrency fraud are quite diverse, coupled with the anonymity and transnational nature of cryptocurrency, it is extremely difficult to track and locate scammers. However, regardless of whether the fraud is carried out through exchange wallets or personal hot wallet addresses on the chain, as long as the fraud group wants to withdraw these digital assets, they must eventually go through the exchange and exchange these cryptocurrencies for US dollars, New Taiwan Dollars and other legal currencies to withdraw them. .
Simply put, exchanges are often the last stop for cryptocurrency cases to be traced on-chain.
After users discover that their personal assets have been defrauded, they can only cooperate with the police and domestic exchanges and ask the exchanges to help freeze their accounts. Since the exchange will require users to perform KYC identity verification when registering, the police will be able to know "who received the stolen money" during the investigation, and then trace the members of the criminal group.
Although domestic exchanges have cooperated with the Taiwan police and prosecutors, many users use overseas exchanges such as Binance and OKX. The Taiwan Financial Supervisory Commission has not yet formulated a joint prevention mechanism for virtual transactions or fraudulent payments. Therefore, overseas exchanges and Taiwan Police cooperation is limited, and many exchanges are even unwilling to cooperate with Taiwan's law enforcement agencies.
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The number of users on the Binance exchange platform has recently exceeded 200 million, making it the most popular exchange in the world. In recent years, it has also actively provided KYC information and criminal investigation assistance to various countries through judicial cooperation.
It can be seen that the assistance of Binance Exchange is very important for Taiwan to detect cryptocurrency fraud cases. If Taiwan stops cooperation with Binance Exchange, it will undoubtedly deepen the challenge for the police to investigate cases. For the current cryptocurrency fraud Rampant problems and no good solutions.
Is Binance really “black”?
Binance Exchange founder Changpeng Zhao reached a comprehensive agreement with the U.S. Department of Justice on November 22, 2023, admitting to criminal charges of money laundering and violating U.S. sanctions. Changpeng Zhao also paid a $50 million fine after resigning as CEO.
Before being sentenced, Changpeng Zhao said, "I think this is the first step to fully admit mistakes and take responsibility. Here, I failed to fully establish a 'KYC real-name authentication' system. I also understand that we need to have a robust KYC and anti-money laundering plan." importance. This is why I instructed Binance to cooperate with the US investigation.”
According to Wen Hongjun, founder of the exchange BitYacht Technology, shared on Facebook, "In the past, Binance relied on regulatory arbitrage (failure to fully comply with regulations) to become the world's largest cryptocurrency exchange in 2017. Putting aside the inconsistency between Zhao Changpeng’s personal Chinese-funded background and mainstream American values, it is true that the Binance platform has not reported numerous money laundering transactions and terrorist financing records over the past few years,” Wen Hongjun added, “In other words, Binance will We have officially entered a period of debt repayment.”
Because Zhao Changpeng actively cooperated with the U.S. government and gained a good record, in May 2024, the U.S. judge gave him a lighter sentence and sentenced him to 4 months in prison, officially bringing this globally watched lawsuit to an end.
Although Binance did make mistakes, its past dark history does not mean that the exchange is still "black" now.
Binance said that “these agreements confirm our company’s responsibility for past criminal compliance violations,” but also emphasized that the company invests significant resources in compliance.
In recent years, Binance has begun to actively cooperate with the supervision of various countries. Currently, Binance has obtained supervision licenses in 18 different jurisdictions around the world, making it the exchange with the most licenses in the industry. In addition, Binance also implements law enforcement training programs around the world to help global law enforcement officers understand blockchain and cryptocurrency and other related knowledge, and improve law enforcement officers’ case-handling skills, and has received many positive feedbacks.
It can be seen that Binance Exchange has attached great importance to the two major directions of "protecting the security of user assets" and "promoting sound industry development" in recent years. In many major international and transnational cases, it has become the "best assist" for the police, assisting law enforcement units in solving cases. and recover the assets that were defrauded.
With the popularity and popularity of cryptocurrency, related fraud incidents have also increased sharply around the world, and Taiwan is especially no exception. Blockchain fraud cases continue to switch between physical, virtual, and cross-border fraud cases, which are more troublesome than traditional fraud cases. Therefore, it will be more important to establish a cross-border joint defense network.
