Binance. After claims that its foreign partner Binance entered the firm’s bank account and transferred over $400 million, the US has stated to clear the air.
Binance.US denied an earlier Reuters allegation that the international exchange purportedly transferred $400 million from an account belonging to the American affiliate.
Binance.US addressed the problem by stating that only platform officials could access the platform’s bank accounts.
According to a Reuters article published on Thursday (Feb. 16, 2023), bank records and corporate messaging revealed that Binance transferred over $400 million from a Binance.US bank account at Silvergate to a trading entity called Merit Peak in the first quarter of 2021. According to the publication, CEO Changpeng Zhao, also known as “CZ,” is the trading firm’s management.
Binance.US, on the other hand, issued a statement via tweet indicating that the report was wrong and out of date without going into further detail. While the US affiliate confirmed Merit Peak’s existence, the corporation stated that the market maker would cease operations on the platform in 2021. The tweet also highlighted that only company executives could access its bank accounts, adding: “Binance.US never has -and will never – trade nor lend out consumer monies. Binance.US keeps 1:1 reserves at all times and is subject to regular audits and regulatory reporting by government organizations.”
The company also stated that its leadership team is made up of former employees of prominent US watchdogs such as the SEC, the Department of Justice (DoJ), the Federal Reserve Bank of New York, and the Federal Bureau of Investigation (FBI), who ensure compliance with US laws and regulations.
Meanwhile, according to the Reuters article, the executives at Binance.US appeared oblivious to the transfers, with texts suggesting that the outflows occurred without the executives’ knowledge.
Binance has always stated that Binance.US is an independent company of the international platform, even though it does not have a license to operate in the United States. Furthermore, while the alleged transactions suggest a mixing of assets, Reuters claimed that it could not determine whether the money in question belonged to Binance—customers in the United States.
Interestingly, Silvergate Bank has recently made headlines and is under investigation by the SEC for its connections with the defunct cryptocurrency exchange FTX. In addition, merit Peak was also under investigation by the Securities and Exchange Commission (SEC) in February 2022 for its ties to Binance.
Binance has also been on the radar of regulators in recent years, has recently admitted to regulatory violations, and is willing to resolve with US regulators.
