Recently, The Block, a well-known crypto news publication, sparked an industry-wide controversy after publishing an article titled: “Binance’s Shanghai office shut down following police raid.” CZ, Binance’s CEO, tweeted immediate and multiple denials, and even threatened to sue The Block over the article. In spite of all this, The Block has largely stood by its story and journalistic integrity, although later notably renaming the previous headline to: “Binance’s Shanghai office shut down following visit by authorities.”
In this post, we will break down the main claims made by both The Block and CZ to ascertain facts from fiction.
Claim 1 [The Block]: Binance has a Shanghai Office
While entity ownership and structure in China is notoriously difficult to untangle, multiple Chinese government sources, including official news agencies, have definitively linked Binance to some level of operations in the city of Shanghai. As it turns out, the entity in question is an “outsourced customer representative team” that Binance has a stake in, operating under the name Babi Finance.
Counterclaim 1 [CZ]:
CZ immediately tweets a rebuttal to all points, but does not provide any concrete evidence backing his rebuttal. Instead, he follows up with an unrelated argument (again without evidence) claiming that other exchanges are out to spread FUD about Binance.
When finally confronted by multiple sources regarding evidence of Binance offices in Shanghai, CZ instead tries to argue the semantics of the word “office.”
TLDR Claim 1: Mostly true. The Block’s claim that Binance has offices in Shanghai are mostly true, although it seems like the operations are outsourced, and the entity is simply under a different name, with some level of Binance ownership.
Claim 2: [The Block] There was a police raid
This claim has been the biggest point of contention between The Block and CZ. The Block’s original uncorrected article “cited an eyewitness who told us that, prior to one of the offices shutting down, police had conducted an investigation of the premises.” According to the same official Shanghai news agency previously linked above, the Binance offices were visited by “local authorities” reminding them that operating domestic exchanges in China is illegal.
Although there is little evidence that the Binance Shanghai office was raided specifically by the police, there is concrete evidence that they were investigated by some type of local authority with punitive powers. The Block soon rectified its previously misleading headline, removing all mentions of a “police raid” and instead using the phrase “visit by authorities.”
Counterclaim 2 [CZ]:
TLDR Claim 2: Somewhat true, but poorly worded. The Block’s initial claim that Binance‘s Shanghai offices were raided by police is poorly worded, seemingly caused by mistranslation. Instead, Binance’s Shanghai offices were visited by “local authorities” who essentially ordered a cease and desist.
Claim 3 [The Block]: Binance’s Shanghai office shut down
The Block’s final claim is that Binance’s Shanghai office shut down following the visit by local authorities. They back up this claim with both primary and secondary sources. The Block’s primary source claims to have witnessed all the above events, including the office shutdown, first-hand. Other sources quoted by The Block include the following:
“Onchain.caijing.com’s article stated that following the publication of our report, its reporter visited the office again on Nov. 22 and found that the office had been cleared out. A building manager told Caijing that Binance staff had left the office ‘two days ago,’ which would be Nov. 20. The publication’s reporters also visited the second office, where people said they hadn’t seen anyone around in the past couple of days.”
This claim is also verified by the previously linked Shanghai news agency.
Counterclaim 3 [CZ]: Debating the semantics of the word “office”
CZ has not denied that the Binance Shanghai office shut down (which probably makes sense from his perspective since he is still debating the semantics of the word “office” in regards to Claim 1).
While The Block’s initial article regarding Binance’s Shanghai office shutdown may have been written with a misleading headline and a few poorly worded phrases (specifically “police raid”), the general premise of their claims is grounded by facts and primary sources. Furthermore, The Block has corrected any inaccuracies in a timely and transparent manner. The same cannot be said of CZ, who continues to categorically deny all claims, debates the semantics of the word “office,” and threatens to sue journalists whose claims are based on facts. We recommend those who can understand Chinese to watch the official Shanghai news video regarding Binance and the shutdown of its Shanghai office.