Binance hit with whistleblower suit by former exec in UK over bribery claims

Amrita Srivastava, a former executive at Binance, has filed a whistleblower lawsuit in the UK, accusing the world’s largest crypto exchange of tolerating bribery within its ranks.

Srivastava claims a colleague asked a customer for a bribe to fast-track their integration into Binance’s ecosystem. She says her decision to report the misconduct cost her job and has accused Binance of wrongful dismissal, alleging that she was fired shortly after flagging the issue to her managers.

Srivastava says the bribe was disguised as payment for “consultative services,” with her colleague pretending to be an external contractor rather than an employee of Binance.

The alleged misconduct occurred while Binance was grappling with a massive U.S. investigation that later resulted in a $4.3 billion penalty for anti-money laundering and sanctions violations.

Binance’s defense

Srivastava joined Binance in April 2022, coming from Mastercard, where she had been head of fintech coverage for Western Europe. At Binance, she worked remotely on the Link platform, which connects brokers and customers to the exchange.

Her tenure ended abruptly in May 2023, a month after she reported the bribery incident. According to her filing, she flagged the issue in April 2023 after learning from a client that they had paid the bribe to a Binance employee.

The customer reportedly told her that the payment was made to ensure smoother operations on Binance’s platform. Srivastava says she refused to ignore the misconduct, describing the situation in her tribunal statement:

“Some things are just right and wrong, and asking for a bribe and defrauding a customer was not a gray area – it is most definitely wrong.”

Binance, though, denies any connection between her dismissal and the bribery claim. The company’s legal team insists that Srivastava was fired for poor performance, not whistleblowing. A spokesperson for Binance said:

“The decision to end her employment for poor performance pre-dated concerns she raised about an issue that was already known and under investigation by our internal audit team.”

Binance also pointed out that the employee accused of soliciting the bribe no longer works at the company. However, Srivastava argues that her dismissal was a direct consequence of speaking up, claiming it has severely damaged her career.

“My experience at Binance has been personally damaging to my career, an impact I will continue to have to undo over the next few years,” she said in her filing.

Bribery allegations and Binance’s troubles

Srivastava’s accusations highlight deeper issues within Binance. She says the company’s management created a chaotic working environment, particularly in the Link unit.

According to her, the pressure to deliver revenue was immense, especially after Binance identified that roughly 25% of Link’s service revenue had come from a client with ties to Iran.

She also alleged that her team faced mounting demands to fill this revenue gap. It was during this period that the bribery incident allegedly took place. A UK-based customer informed Srivastava that they had handed over money to her colleague under questionable circumstances.

The payment, disguised as a consultation fee, was supposedly intended to speed up the customer’s integration into Binance.

These claims come as Binance continues to face unprecedented regulatory and legal challenges. In November 2023, the company pleaded guilty to violating U.S. anti-money laundering and sanctions laws, agreeing to pay a historic $4.3 billion fine.

While Srivastava’s allegations are now under review by the tribunal, Binance’s lawyer argues the company has a strong internal process for investigating misconduct.

Awards for whistleblowing cases in the UK’s employment tribunal are uncapped, meaning Srivastava could secure significant compensation if her claims are upheld. In contrast, awards for unfair dismissal are capped at £105,700.

FTX fallout adds more pressure

Binance is also facing a lawsuit from the estate of collapsed crypto platform FTX. The lawsuit, filed in Delaware, accuses Binance and its CEO Changpeng “CZ” Zhao of orchestrating a fraudulent share deal that siphoned $1.76 billion from FTX.

The FTX estate alleges that Binance and CZ exited their investment in FTX in 2021 by selling a 20% stake in FTX’s global operations and an 18.4% stake in its U.S.-based entity, West Realm Shires.

The payment for this transaction, according to the lawsuit, came from FTX’s Alameda Research, which was insolvent at the time. The estate argues that the deal constituted a “fraudulent transfer,” as FTX lacked the financial resources to fund the transaction.

Binance has denied the allegations. In an emailed statement, the company called the claims “meritless” and vowed to “vigorously defend” itself. The lawsuit also accuses CZ of contributing to FTX’s collapse through misleading and inflammatory tweets.

A Nov. 6, 2022 tweet from CZ stated, “Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won’t pretend to make love after divorce.” The FTX estate argues this tweet triggered a liquidity crisis that led to the exchange’s downfall.

Once valued at $32 billion, the exchange filed for bankruptcy in November 2022 after facing a surge in customer withdrawals it could not cover. Its founder, Sam Bankman-Fried, was later convicted of fraud and sentenced to 25 years in prison. Binance has not been able to avoid the fallout. CZ himself was behind bars for four months.

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