Crypto Exchange Binance Accused of Mixing Customers’ Funds With Private Reserves
Key Takeaways:
Three Reuters-associated sources accused Binance of capital mismanagement.
Binance denied the allegations claiming they upheld transparency.
Binance blamed Reuters for xenophobia against its founder Changpeng Zhao.
YEREVAN (Coinchapter.com) — It seems that Binance, the leading crypto exchange by volume, can’t constantly shake off the myriad of allegations thrown in its direction; this is only one of many. Either way, let’s dive to see the light.
Insider accusations
A recent special report by Reuters claims that Binance fused (mismanaged) customer funds with company earnings in 2020 and 2021.
Reuter’s insiders say Binance has merged billions of USD daily through the now-defunct Silvergate Bank.
The news agency couldn’t confirm the numbers yet reviewed a bank record showing that on Feb 10, 2021, Binance took $20 million from a corporate account and combined it with $15 million from a customer account.
The anonymous source also told Reuters that the funds were combined into a third account. Subsequently, the funds were converted into the Binance-owned stablecoin BUSD.
Albeit, the report also states that:
“It found no evidence that Binance client monies were lost or taken.”
Former SEC regulator John Reed Stark commented on the situation by saying
“Binance customers shouldn’t need a forensic accountant to find where their money is.”
Furthermore, the former regulators said that moving money in this manner enables the Binance exchange to shield itself from tax authorities.
The dangers of commingling
Nonetheless, illegal funds commingling is considered a breach of U.S financial law that requires customer money to be kept separately from corporate savings. In addition, this mismanagement will create problems of transparency and fund security.
Binance strikes back
Binance, however, refuted the statements made by Reuters.
Patrick Hillmann, Chief Comms Officer at Binance, told the public about the false claims and ”poor journalism” of Reuters in a quote:
“This story is so weak that they have to put up a front, in a transparent attempt to protect themselves from a libel suit.”
Hillmann added further on by saying:
“We keep our user and corporate funds on completely separate ledgers.”
Hillman, additionally, clapped back at Reuters by pointing out their xenophobia toward the Binance founder Changpeng Zhao. Let’s let the quote do the talk:
“The xenophobia behind consistently mentioning @cz_binance’s ethnicity without noting that he’s been Canadian since the age of 12 is about as subtle as a hammer wrapped in a pillowcase.”
The post Crypto Exchange Binance Accused of Mixing Customers’ Funds With Private Reserves appeared first on CoinChapter.
Filed under: Bitcoin - @ June 1, 2023 6:15 pm