Key Points:
- Binance has responded to a Reuters special investigation alleging that the crypto exchange mixed consumer cash with company income.
- According to Reuters, no proof of the exchange’s customer funds being lost or stolen was discovered.
- Patrick Hillmann, the company’s CCO, termed it “weak” and full of “conspiracy theories.”
Binance dismisses charges of misuse of consumer funds. Binance’s denial followed a Reuters article alleging that the crypto exchange mixed consumer payments with corporate income.
According to three unidentified individuals quoted in a Reuters article on Tuesday, Binance, the world’s biggest cryptocurrency exchange, has been accused of mingling customer cash with its own business earnings in breach of US financial rules. This breach is said to have happened in 2020 and 2021.
According to Reuters, one of the sources said that the combined funds were billions of dollars. According to the insider, the commingling occurred practically daily in Binance’s accounts at Silvergate Bank, a crypto-focused bank that shut down operations after a collapse in March.
“Commingling,” or the mixing of client and corporate assets, has become a kind of a feared buzz term in the cryptosphere since reports after the demise of exchange giant FTX in November last year raised suspicions that the practice was widespread.
According to the investigation, money from customers was sent to the Silvergate account of Key Vision Development, a Seychelles-based firm controlled by Changpeng Zhao, CEO of Binance. The exchange apparently advised Silvergate that the main objective of the Key Vision account was to accept USD payments from non-US consumers.
It was also claimed that a second Silvergate-based account connected to the Binance CEO’s Cayman corporation was used to convert funds into the dollar-linked coin Binance USD. But, according to the Reuters story, there was no proof that the exchange’s customer fund was lost or stolen.
Binance itself has been accused of money mixing after a January Bloomberg story showed that the exchange had retained collateral for some crypto assets it issued in the same wallet as monies belonging to consumers.
Nevertheless, Binance’s Chief Communications Officer Patrick Hillmann attacked the Reuters article, calling it “weak” and full of “conspiracy theories.” He said:
“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 purchase of a stablecoin that was redeemable by Paxos, which was explicitly stated on the page.”
Hillmann later noted that the conversation had addressed the matter “on multiple occasions.”
The current flurry of claims against the exchange for violating US banking regulations comes just months after the exchange was sued by the Commodities Futures Trading Commission (CFTC).
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
Author
News
Binance Fights Allegations Of Abuse Of Client Funds
Key Points:
- Binance has responded to a Reuters special investigation alleging that the crypto exchange mixed consumer cash with company income.
- According to Reuters, no proof of the exchange’s customer funds being lost or stolen was discovered.
- Patrick Hillmann, the company’s CCO, termed it “weak” and full of “conspiracy theories.”
Binance dismisses charges of misuse of consumer funds. Binance’s denial followed a Reuters article alleging that the crypto exchange mixed consumer payments with corporate income.
According to three unidentified individuals quoted in a Reuters article on Tuesday, Binance, the world’s biggest cryptocurrency exchange, has been accused of mingling customer cash with its own business earnings in breach of US financial rules. This breach is said to have happened in 2020 and 2021.
According to Reuters, one of the sources said that the combined funds were billions of dollars. According to the insider, the commingling occurred practically daily in Binance’s accounts at Silvergate Bank, a crypto-focused bank that shut down operations after a collapse in March.
“Commingling,” or the mixing of client and corporate assets, has become a kind of a feared buzz term in the cryptosphere since reports after the demise of exchange giant FTX in November last year raised suspicions that the practice was widespread.
According to the investigation, money from customers was sent to the Silvergate account of Key Vision Development, a Seychelles-based firm controlled by Changpeng Zhao, CEO of Binance. The exchange apparently advised Silvergate that the main objective of the Key Vision account was to accept USD payments from non-US consumers.
It was also claimed that a second Silvergate-based account connected to the Binance CEO’s Cayman corporation was used to convert funds into the dollar-linked coin Binance USD. But, according to the Reuters story, there was no proof that the exchange’s customer fund was lost or stolen.
Binance itself has been accused of money mixing after a January Bloomberg story showed that the exchange had retained collateral for some crypto assets it issued in the same wallet as monies belonging to consumers.
Nevertheless, Binance’s Chief Communications Officer Patrick Hillmann attacked the Reuters article, calling it “weak” and full of “conspiracy theories.” He said:
“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 purchase of a stablecoin that was redeemable by Paxos, which was explicitly stated on the page.”
Hillmann later noted that the conversation had addressed the matter “on multiple occasions.”
The current flurry of claims against the exchange for violating US banking regulations comes just months after the exchange was sued by the Commodities Futures Trading Commission (CFTC).
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
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