Binance.US Detected Transferred $400 Million To A Firm Managed By CZ: Reuters Report

Key Points:

• Binance.US transferred over $400 million to a company run by Changpeng Zhao, CEO of Binance.
• According to the Reuters article, Binance.US allegedly transferred millions of dollars from a Silvergate Bank account to a trading company named Merit Peak under the name of BAM Trading.
• Changpeng Zhao, CEO of Binance, has been appointed manager of Merit Peak. Since 2019, Binance and its US branch have had to conduct their business independently.

Binance.US has quietly transferred a huge amount of cash to a trading company linked to CEO Changpeng Zhao.

According to Reuters, the world’s largest cryptocurrency exchange Binance has secretly transferred more than $400 million to a company managed by CEO Changpeng Zhao. The Reuters article also asserts that Binance’s management team has access to Binance.US’s bank accounts, despite numerous claims in the past that the two organizations are independent.

The news outlet said that in the first quarter of 2021, Binance accessed the account of BAM Trading – the organization that operated the US branch of Binance – at Silvergate Bank and transferred the money to Merit Peak. This trading company is currently operating. was investigated by the SEC for its relationship with Binance. Accordingly, these transactions have been conducted since the end of 2020.

Merit Peak names Binance CEO Changpeng Zhao as its manager. Binance and Binance.US have been required to operate separately since 2019. As such, the above transactions imply that Zhao has a possibly inappropriate financial connection to Binance.US.

The transactions, according to Reuters, reveal that Binance controls the funds of Binance.US. Additionally, it mentioned that Merit Peak was a dealer on Binance.US and cited regulators to claim that there was a conflict of interest because the information wasn’t made public. However, Reuters was unable to ascertain if the moved cash belonged to exchange clients or the rationale for the transactions.

Reuters also discovered text that shows former Binance.US CEO Catherine Coley questioning the transactions at the time and calling them unusual. Shortly after, Ms. Coley left the company in April 2021 for unknown reasons.

The Reuters article thereby paints a confusing picture of the relationship between companies related to Binance. Accordingly, US users, after registering for an exchange account, will deposit USD into the exchange’s bank account through the Prime Trusts payment processor.

This USD amount will be withdrawn by Merit Peak and then transferred to Key Vision, the organization that handles USD deposit transactions of the international Binance exchange. The Binance exchange will then send the crypto to Merit Peak to be transferred back to Binance.US and credited to the user account by the exchange.

The current Binance.US CEO claimed to have no knowledge of the incident and expressed concern. In a statement, a company’s representative denied the transfer information but declined to explain the transaction.

Reuters’ information was gleaned from Binance.US’s private bank messages and records. However, Binance.US informed Reuters that it had accessed “outdated information” and declined to comment more on the transactions. According to Reuters, Merit Peak does not use the company’s trading services, its operations ended at an unspecified time.

When news broke that the U.S. SEC was looking into the exchange’s numerous partners in February 2022, the relationship between Binance.US and Merit Peak came to light. According to the article, the company was initially subpoenaed by the SEC in 2020.

On February 16, Binance said it was willing to pay fines to mediate investigations being carried out by US federal agencies.

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Harold

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