05-25-2023, 01:00 PM
Binance Jumbled Customer Funds with Company Revenue: Report
<p>Binance,
the largest <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" class="terms__main-term" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa">cryptocurrency exchange</a> by trading volume, mixed up customer funds
with company revenue between 2020 and 2021, Reuters reported on Tuesday, citing
“three sources familiar with the matter.” The act violates the US financial
laws that require both funds to be separated, the outlet said.</p><p class="MsoNormal text-align-justify">‘Billions
of Dollars’ Commingled?</p><p class="MsoNormal">One source
that had direct knowledge of the crypto exchange’s group finances, told the
news agency that Binance blended its earnings with its customer’s money, with
the figure running into “billions of dollars.” The source further said that the violation occurred
“almost daily” in accounts held by Binance at <a href="https://www.financemagnates.com/cryptocurrency/silvergate-bank-announces-voluntary-liquidation-amid-troubles/" target="_blank" rel="follow">now-liquidated US
lender Silvergate Bank</a>.</p><p class="MsoNormal text-align-justify">Earlier, Reuters had reported in February that Binance had secret access to a bank account
held by its United States arm, Binance.US, through which the CEO, Changpeng Zhao
between January and March 2021 moved over $400 million to a trading firm called
Merit Peak Limited. </p><p class="MsoNormal text-align-justify">For its latest investigation, Reuters noted that while it could not independently confirm the
source’s figures, it obtained a bank record showing that Binance on February
10, 2021, mingled $20 million from a corporate account with $15 million from an
account dedicated to receiving customers’ funds. Furthermore, Reuters said it
could not find evidence that customer funds were lost as a result of the
commingling. </p><p class="MsoNormal">Providing Binance's reaction to the allegations, Reuters said that the exchange's spokesperson denied its finding, saying that the accounts were not used to receive user deposits.
Instead, the spokesperson told Reuters, the accounts were deployed to aid users’
purchases. </p><p class="MsoNormal">“There was
no commingling at any time because these are 100% corporate funds,” the spokesperson said.</p><p class="MsoNormal text-align-justify">Binance
Blasts Reuters Report</p><p class="MsoNormal">Meanwhile, reacting to
the report, Patrick Hillmann, Binance’s Chief Communication Officer, on Twitter described
the story as “weak,” noting that Reuters wrote “conspiracy theories” on what the exchange had previously
clarified was false. Moreover, Hillmann said the news agency lacked “zero evidence other than a ‘a
former insider.’”</p><p class="MsoNormal">“We’ve been
very public about where the company had regulatory shortcomings in the past,
there’s no reason for a respected news outlet like Reuters to continue making
stuff up,” Hillmann wrote.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Let me explain just how desperate a journalist <a href="https://twitter.com/Reuters?ref_src=twsrc%5Etfw">@Reuters</a> is to publish a negative story. The whole base of their story this morning, is that when users purchased BUSD (Paxos) from Binance, they were taken to a transaction page that had the term “deposit” on it. Users were making a…</p>— Patrick Hillmann (@PRHillmann) <a href="https://twitter.com/PRHillmann/status/1660987014626287617?ref_src=twsrc%5Etfw">May 23, 2023</a></blockquote><p class="MsoNormal">Reuters’
report comes less than two months after the US derivatives market regulator <a href="https://www.financemagnates.com/cryptocurrency/cftc-sues-binance-for-illegal-derivatives-exchange-numerous-violations/" target="_blank" rel="follow">charged
Binance with operating an illegal digital assets exchange</a> in the country.
Furthermore, the Commodity and Futures Trading Commission accused Zhao of running
Binance via several entities and through “an intentionally opaque common
enterprise.”</p><p class="MsoNormal">Hidden Road taps Crossover Markets; Equiti in Uganda; <a href="https://www.financemagnates.com/forex/news-nuggets-23-may-hidden-road-taps-crossover-markets-equiti-in-uganda/" target="_blank" rel="follow">read today's nuggets</a>.</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...ue-report/
<p>Binance,
the largest <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" class="terms__main-term" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa">cryptocurrency exchange</a> by trading volume, mixed up customer funds
with company revenue between 2020 and 2021, Reuters reported on Tuesday, citing
“three sources familiar with the matter.” The act violates the US financial
laws that require both funds to be separated, the outlet said.</p><p class="MsoNormal text-align-justify">‘Billions
of Dollars’ Commingled?</p><p class="MsoNormal">One source
that had direct knowledge of the crypto exchange’s group finances, told the
news agency that Binance blended its earnings with its customer’s money, with
the figure running into “billions of dollars.” The source further said that the violation occurred
“almost daily” in accounts held by Binance at <a href="https://www.financemagnates.com/cryptocurrency/silvergate-bank-announces-voluntary-liquidation-amid-troubles/" target="_blank" rel="follow">now-liquidated US
lender Silvergate Bank</a>.</p><p class="MsoNormal text-align-justify">Earlier, Reuters had reported in February that Binance had secret access to a bank account
held by its United States arm, Binance.US, through which the CEO, Changpeng Zhao
between January and March 2021 moved over $400 million to a trading firm called
Merit Peak Limited. </p><p class="MsoNormal text-align-justify">For its latest investigation, Reuters noted that while it could not independently confirm the
source’s figures, it obtained a bank record showing that Binance on February
10, 2021, mingled $20 million from a corporate account with $15 million from an
account dedicated to receiving customers’ funds. Furthermore, Reuters said it
could not find evidence that customer funds were lost as a result of the
commingling. </p><p class="MsoNormal">Providing Binance's reaction to the allegations, Reuters said that the exchange's spokesperson denied its finding, saying that the accounts were not used to receive user deposits.
Instead, the spokesperson told Reuters, the accounts were deployed to aid users’
purchases. </p><p class="MsoNormal">“There was
no commingling at any time because these are 100% corporate funds,” the spokesperson said.</p><p class="MsoNormal text-align-justify">Binance
Blasts Reuters Report</p><p class="MsoNormal">Meanwhile, reacting to
the report, Patrick Hillmann, Binance’s Chief Communication Officer, on Twitter described
the story as “weak,” noting that Reuters wrote “conspiracy theories” on what the exchange had previously
clarified was false. Moreover, Hillmann said the news agency lacked “zero evidence other than a ‘a
former insider.’”</p><p class="MsoNormal">“We’ve been
very public about where the company had regulatory shortcomings in the past,
there’s no reason for a respected news outlet like Reuters to continue making
stuff up,” Hillmann wrote.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Let me explain just how desperate a journalist <a href="https://twitter.com/Reuters?ref_src=twsrc%5Etfw">@Reuters</a> is to publish a negative story. The whole base of their story this morning, is that when users purchased BUSD (Paxos) from Binance, they were taken to a transaction page that had the term “deposit” on it. Users were making a…</p>— Patrick Hillmann (@PRHillmann) <a href="https://twitter.com/PRHillmann/status/1660987014626287617?ref_src=twsrc%5Etfw">May 23, 2023</a></blockquote><p class="MsoNormal">Reuters’
report comes less than two months after the US derivatives market regulator <a href="https://www.financemagnates.com/cryptocurrency/cftc-sues-binance-for-illegal-derivatives-exchange-numerous-violations/" target="_blank" rel="follow">charged
Binance with operating an illegal digital assets exchange</a> in the country.
Furthermore, the Commodity and Futures Trading Commission accused Zhao of running
Binance via several entities and through “an intentionally opaque common
enterprise.”</p><p class="MsoNormal">Hidden Road taps Crossover Markets; Equiti in Uganda; <a href="https://www.financemagnates.com/forex/news-nuggets-23-may-hidden-road-taps-crossover-markets-equiti-in-uganda/" target="_blank" rel="follow">read today's nuggets</a>.</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...ue-report/