Crypto exchange giant Binance is denying allegations that it secretly moved large sums of money from its US affiliate to a trading firm associated with its CEO Changpeng Zhao.
A report by Reuters claims that between January and March 2021, a Silvergate Bank account named under Binance.US’s operating company BAM Trading moved over $400 million to Merit Peak, a market maker managed by Zhao himself.
Company messages also show that the transfers, which began in late 2020, took place without the knowledge of Binance.US executives, according to Reuters.
The report says it was not able to determine if the cash outflows involved funds belonging to clients of Binance.US.
In response, Binance issued a statement saying that it does not have access to bank accounts held by its independent US partner.
“ONLY Binance.US employees have access to Binance.US bank accounts. Period.
While there was a market making firm named Merit Peak that operated on the Binance.US platform, it stopped all activity on the platform in 2021.
We list our competitive and transparent Market Maker program on our website, which shows that firms fairly compete for rebates.”
The crypto titan also assures its customers that their funds are in good hands.
“Our leadership team is staffed with former DOJ, SEC, FBI, and NYFed employees who are committed to operating a platform that is safe and abides by U.S. laws and regulations…
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.”
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Source: https://dailyhodl.com/2023/02/19/binance-us-responds-to-reports-alleging-secret-400000000-bank-transfers-to-firm-managed-by-ceo-changpeng-zhao/