Binance.US refuted an earlier report made by Reuters, which stated that the international exchange allegedly moved $400 million from an account belonging to the American affiliate.
In an attempt to clarify the situation, Binance.US said that only executives of the platform had such access to its bank accounts.
Binance Purportedly Transferred $400 Million from Binance.US
A report released by Reuters on Thursday (Feb. 16, 2023) claimed that bank records and company messages revealed that crypto exchange giant Binance transferred over $400 million from a Binance.US bank account at Silvergate to a trading firm called Merit Peak in the first quarter of 2021. According to the publication, the trading firm listed CEO Changpeng Zhao, otherwise known as “CZ,” as its manager.
Binance.US, has, however, issued a statement via a tweet stating that the report was incorrect and outdated without going into details. While the American affiliate acknowledged the existence of Merit Peak, the firm stated that the market maker stopped operating on the platform in 2021. The tweet further stressed that only executives of the company could access its bank accounts, adding:
“Binance.US has never -and will never – trade nor lend out customer funds. Binance.US always maintains 1:1 reserves, and are subject to regular audits and regulatory reporting by government entities.”
The firm also said its leadership team comprises former employees from top 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 United States laws and regulations.
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Meanwhile, it seemed that people at the helm of affairs at Binance.US were unaware of the transfers, as stated in the Reuters report, with messages revealing that the outflows happened without the executives’ knowledge.
Ready to Settle
Binance, which does not have a license to operate in the United States, has always claimed that Binance.US is an independent entity of the international platform. While the supposed transfers suggest a co-mingling of funds, Reuters, however, stated that it could not tell whether the money in question belonged to Binance.US customers.
Notably, Silvergate Bank has been in the news lately and is facing a regulatory probe for its dealings with bankrupt crypto exchange FTX. Merit Peak was also reportedly under investigation in Feb. 2022 by the Securities and Exchange Commission (SEC) for its ties to Binance.
Binance has also been under regulators’ radar in recent years, recently admitted to lapses in its regulatory compliance, and is willing to reach a settlement with US regulators.
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