Binance's Shanghai office shut down following visit by authorities, sources say

Asia • November 21, 2019, 10:52AM EST

Quick Take

Binance’s Shanghai office shut its doors following a recent visit by authorities, sources told The Block
Many of the exchange’s executives and around “50-100 employees” worked at the office, said sources
The Shanghai government recently conducted a probe of cryptocurrency-related activities, while Binance also made its ambition to return to the Chinese market clear in recent months

Editor's note: This post has been updated with additional reporting and information. The new report can be viewed here.

Binance’s Shanghai office, which once hosted some of the exchange's top executives, abruptly closed its doors in recent weeks, forcing employees to either work remotely or relocate to Singapore, several sources close to the matter told The Block.

According to sources, the cryptocurrency exchange’s Shanghai office was recently visited by local officials. Sources said many of Binance's executives along with as many as 100 other employees worked at the office. The cryptocurrency exchange is headquartered in Malta.

Notably, top executives such as CEO Changpeng "CZ" Zhao and CMO Yi He were part of the group that relocated to Singapore, according to sources.

In a tweet dated Nov. 20, Zhao said that office and headquarters are outdated concepts and "time is moving on."

Different sources within Binance described the circumstances around the office closure in different, at times contradictory ways. When reached for comment, a Binance spokesperson refuted the report, saying that the exchange doesn't have "a fixed office in Shanghai."

“We don't have entities in China, most of us work remotely in China," said the spokesperson. Binance's denial of the mere existence of a Chinese office comes despite The Block having seen photographs of the office as part of conversations with Binance representatives about the location in question.

When Beijing office?

In October, it was reported that Binance planned to open a new office in Beijing in addition to its Shanghai location. However a Binance spokesperson subsequently denied that the exchange has any China-based offices, and sources with direct knowledge of the matter confirmed to The Block that the exchange has no immediate plans to move into Beijing. In an interview with Bloomberg, Zhao dismissed Binance's Beijing office as "a rumor."

The news comes a few months after the China-born exchange made its ambitions to return to the Chinese market clear. However, the Chinese government has shown an ambivalent attitude towards cryptocurrency trading and blockchain.

Although Chinese president Xi Jinping has publicly applauded blockchain technology, and local governments such as Guangzhou have set up funds to support blockchain projects, the regulatory status of cryptocurrencies still remains ambiguous. Recently, the Shanghai local government pushed for a crackdown on cryptocurrency-related activities. The campaign, which ended on Nov. 22 Beijing time, required crypto businesses located in the city to be reported and close down. One of China's most high profile news broadcasts also exposed the prevalence of frauds in cryptocurrencies last week, saying that over 755 tokens on the Chinese market are not backed by actual blockchain technology.

“I don't believe the recent Shanghai cryptocurrency probe targeted Binance," said the Binance spokesperson.

Recently, Chinese social media site Weibo banned Binance's official accounts, citing "violations of laws and regulations and the relevant provisions of the Weibo Community Convention." However, the Weibo accounts of cryptocurrency exchanges Huobi and OKEx remain intact.

About Author

Celia joined The Block as a reporter after earning her BA in the History of Science from the University of Chicago. Having spent years pondering over why 2+2 cannot equal 5, she is interested in the history and philosophy of mathematics, computation, and cryptography. She also had a very brief stint at Crunchbase News.