TechFlow reported, according to the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN), that Binance VIP users were granted a series of special privileges, including advance notice when under law enforcement investigation.
The Treasury claimed in a 92-page order that Binance "developed a process to notify VIP users if they become the subject of a law enforcement investigation," effectively enabling Binance to monitor its own VIP customers.
According to FinCEN, the process was relatively straightforward: members of Binance’s VIP team were instructed to contact investigated users through "all available means," including sending text messages and making phone calls to inform them, for example, that their accounts had been frozen or unfrozen. FinCEN warned Binance VIP team staff not to make these alerts overly obvious.
The company advised its VIP team: "Under no circumstances should we give a strong hint that directly urges users to run or withdraw, otherwise we could face prosecution or personal liability. For example, saying your account has been unlocked or your account is being investigated by XXX is usually a sufficiently clear and serious hint."
Internal reports from Binance indicate that, as of 2019, VIP customers "consistently accounted for two-thirds to three-quarters of trading volume and revenue on Binance.com," FinCEN added, noting that "Binance therefore had significant commercial incentives" to support these VIP users "at all costs." Although rules prohibit Americans from trading on the platform, U.S. users "represented a significant portion of the VIP user base" and at times accounted for 20% of all trading fees on the exchange.
