Binance Leaks Spell Trouble with SEC, ‘Nuclear Fallout’

Leaked documents show that Binance used Binance.US to circumvent the SEC.

SEC Chair Gary Gensler in the foreground, as Binance CEO lurks behind a fog over tokens.
  • Binance execs warned of a “nuclear fallout” if US regulators crack down on the firm. 
  • Binance started Binance.US in an apparent effort to elude US regulators, leaks show.
  • Leaked messages show close ties between Binance.US and its parent company. 

Binance, the world’s largest crypto exchange, is facing potential trouble with the US Securities and Exchange Commission (SEC) after leaked messages demonstrate a plan to circumvent US regulators.

Binance executives warned of “nuclear fallout” if US regulators looked into the exchange, leaked messages suggest. 


According to the leaks in a report by The Wall Street Journal, the plan was to build a separate US platform, Binance.US. The US subsidiary would license Binace’s technology and brand, but we are otherwise independent. More importantly, it would shield Binance from US regulators. 

New information suggests that Binance and Binance.US are more connected than previously thought. These revelations could put Binance at risk of an SEC crackdown, bringing the “nuclear fallout” the executives feared. 

Binance Tells US Customers to Use VPNs? 

US regulators, including the SEC, claim authority over every financial company that does business with US individuals. To ward off US regulators, Binance took steps to make their services not available in the US. 

One of these was blocking access to the platform from IP addresses from the US. However, leaked texts show that Binance employees knew US users circumvented these bans.


For instance, one Binance employee noted that more than 18% of page views on were from U.S. users. Certain executives encouraged some of their bigger users to get around these blocks. 

“Have them be creative and VPN,” Binance compliance chief Samuel Lim wrote in June 2019. A virtual private network (VPN) allows internet users to mask where they are connecting from. This would allow any user to log into Binance from the US, circumventing Binance’s ban. 

Binance.US Employees Sending Updates to Binance Executives

More details on Binance.US links to Binance came from messages by Binance.US’s CEO Catherine Coley. Publicly, Coley said that Binance.US is “simply licensing software” from Binance. However, her chat logs tell a different story. 

In a leaked chat, she told Binance.US employees to prepare updates on their work for Binance’s CFO Wei Zhou and CEO Changpeng (CZ) Zhao

“Everyone, please post your weeklies before tonight 7 pm est/4 pm pst so we can be in the good graces of Wei. Saturday is for the Weekly Updates! Send me 2-5 bullet points of what we think CZ/Wei should know about your work this past week,” Coley wrote.

Leaked documents put Binance in a difficult position. They suggest that Binance could be at risk of regulatory scrutiny by the SEC. Reports from February 2023 suggest that the SEC is already looking into Binance’s relationship with Binance.US. 

On the Flipside

  • Earlier, Binance tried to minimize ties with Indian exchange WazirX and US-based Paxos when they came under regulatory scrutiny. 
  • Binance CEO told his Twitter followers on Sunday to ignore “FUD” and fake news. 

Why You Should Care 

Binance is by far the largest crypto exchange in the world. The potential fallout from the SEC’s crackdown on Binance could have major implications for the entire crypto market. 

Read about Binance’s trouble with US regulators over the BUSD token:
Coinbase Delists BUSD: Blow to Binance in ‘Stablecoin Wars’

Read about Coinbase’s potential troubles with regulators: 
Coinbase Staking Is Self-Custodial, Claims CEO: But What About USDC ‘Staking’?

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.