Wang Hongwei Criticizes Binance as "International Fraud Syndicate," Urges Ministry of Justice to Cease Cooperation; Binance Clarifies: "Never Penalized for Fraud"

Deputy Minister of Justice, Hsu Hsi-hsiang, attended the Legislative Yuan's Finance Committee session today, presenting a special report on the "Draft Amendments to the Anti-Money Laundering Act" and the "Fraud Crime Prevention Ordinance" related to preventing virtual assets and transactions from becoming tools for fraud. The report also covered the progress of special laws for virtual assets.

Wang Hongwei Criticizes Ministry of Justice for Helping Binance "Whitewash"

KMT legislator Wang Hongwei expressed her confusion during the session, questioning why the Ministry of Justice and investigative agencies have been holding multiple seminars on new types of crime, especially focusing on virtual currencies, in collaboration with Binance since last year.

Deputy Minister Hsu clarified that these seminars were initiated by investigative agencies, not the Ministry of Justice. However, Wang was unsatisfied, criticizing Binance for being notorious worldwide, pointing out that its founder Changpeng Zhao has been sentenced in the U.S. and that Binance has faced penalties in the U.S., Canada, and India for money laundering. She questioned whether the Ministry of Justice was helping Binance whitewash its image by cooperating with them.

Jian Meihui, Deputy Director of the Department of Prosecutorial Affairs, responded that the Ministry of Justice is not Binance's regulatory authority. However, she explained that when handling virtual asset cases, prosecutors and the Criminal Investigation Bureau need to obtain financial flow and transaction data, which requires cooperation with domestic and international virtual asset exchanges, including Binance. In certain cases, Binance has indeed assisted prosecutorial agencies in retrieving relevant data.

Wang Hongwei remained dissatisfied with this response, accusing Binance of being a "money laundering crime syndicate" known internationally. She questioned why data retrieval had to go through Binance, implying that past collaborations with foreign entities were futile:

"You have made a mistake, and you are still being stubborn. Stop cooperating with Binance! Stop this internationally embarrassing behavior!"

"Taiwan is truly an island of fraud! These overseas frauds come to Taiwan to whitewash themselves? It's a complete fraud island, and should we promote this to the world?"

"So, since I've raised this issue today, I hope the Ministry of Justice understands Binance's notorious behavior worldwide and stops cooperating with them. Can't you find legitimate operators? This is simply outrageous."

Reactions from the Crypto Industry

The Legislative Yuan's questioning session elicited mixed reactions from some members of Taiwan's crypto community, with some finding it "ridiculous." While they appreciated the legislator's focus on cryptocurrency-related crime, they felt Binance was being unfairly targeted. An anonymous crypto industry expert told Block Tempo:

"Basically, Binance is the world's largest crypto exchange and has assisted many countries in criminal investigations through judicial cooperation. The U.S. lawsuit against Binance has already been settled, and Binance actively cooperates with governments to provide KYC data. If they were a criminal organization, why would they provide data to the police? It’s wrong to label them as a fraud and money laundering organization."

"If these statements lead the Ministry of Justice to stop cooperating with the exchange with the most registered users globally, which one should they work with? How will law enforcement investigate cases in the future?"

The expert added that with VASP operators and industry legislation on the horizon, it's crucial for industry participants and lawmakers to clearly distinguish between allies and adversaries. The legislator's remarks, he argued, complicate law enforcement and could draw criticism from both industry insiders and law enforcement personnel.

Binance's Response

In response, a Binance spokesperson issued a statement clarifying that Binance has never been penalized for fraud or deception. On the contrary, Binance actively cooperates with global law enforcement and continually strengthens its compliance programs to ensure the safety of users' assets and promote healthy development of the virtual asset industry.

For example, Binance's Global Law Enforcement Training Program aims to help law enforcement worldwide understand blockchain and virtual assets, enhancing their investigative skills. In 2023, the Binance team conducted over 120 in-person and online training sessions globally, including in Taiwan, South Korea, Australia, Thailand, Hong Kong, and various EU and Latin American countries, receiving positive feedback from the law enforcement community.

Furthermore, in virtual asset investigations, centralized exchanges hold customer identification and account information, making public-private cooperation crucial for case investigations. This is the standard practice in international cooperation.

"At Binance, we actively cooperate with global law enforcement, providing information on suspicious transactions, retrieving documents, freezing and seizing transfers, and playing a key role in several major international criminal cases. For example, Binance assisted Taiwan law enforcement in cracking a money laundering case involving nearly NT$200 million and previously helped Dutch law enforcement recover millions of euros involved in fraud."

Binance also reiterated its commitment to responding positively and assisting law enforcement requests. The company emphasized that it has the industry's strongest anti-money laundering and anti-terrorism compliance program, recognized by multiple international jurisdictions. Currently, Binance has obtained regulatory licenses in 18 different jurisdictions worldwide, making it the exchange with the most licenses in the industry.