A group of American senators has requested documents from the cryptocurrency exchanges Binance and Binance US regarding "potentially illegal business practices."

Do American senators want to target Binance?

Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall sent a letter to Binance and Binance US this week, calling on both cryptocurrency exchanges to provide them with certain documents.

The letter was addressed to Binance CEO Changpeng Zhao (CZ) and BAM Trading Services CEO Brian Shroder. It requests documents and answers to questions regarding "finances, risk management strategies, and compliance operations." The senators pointed to "potentially illegal business practices" that both companies may be responsible for.

It should be noted that Binance and its US branch, Binance US, are two separate entities. BAM Trading Services operates as Binance US.

Citing various media reports that suggest Binance may have violated the law, the senators wrote that the exchange and "related entities deliberately evaded regulatory bodies," enabled funds transfers to criminals and individuals seeking to evade sanctions, and "concealed fundamental financial information from its clients and the public."

"Your actions have called into question the legitimacy of your business operations and the safety of your customers' assets, and raised concerns about the potential impact of these actions on the stability of the cryptocurrency market and the broader financial system," the politicians emphasized.

The letter also noted that Binance hired the French auditing firm Mazars to conduct an audit confirming the exchange's reserves. However, the auditing firm "removed the report" from the network, which raises some concerns among regulators.

The company has little time to respond

The senators want to receive the requested documents and answers to questions by no later than March 16. They want to obtain "complete copies of all Binance and Binance's subsidiary companies' balance sheets" as well as the internal regulations and procedures of the companies regarding anti-money laundering (AML), counter-terrorism financing (CFT), and "know your customer" (KYC).

A copy of the senators' letter was sent to Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), and Merrick B. Garland, US Attorney General at the Department of Justice (DOJ).

A few days ago, Forbes published an article suggesting that Binance transferred nearly $2 billion of its clients' funds without their consent. The company reportedly denies these allegations.