Key Points:
- According to bank records and company messages, a senior Binance executive secretly retained control over Binance U.S finances, including an account holding American customers’ funds.
- Despite both firms claiming independence, Binance’s management extended across its bank accounts at Silvergate, and employees at Binance.US had to ask the executive’s team to process payments.
A recent report by Reuters reveals that a senior Binance executive was the main operator for five bank accounts belonging to Binance U.S. affiliates.
According to bank records from 2019 and 2020, U.S. lender Silvergate Bank authorized Guangying Chen, a close associate of Binance CEO Changpeng Zhao, to operate the accounts. This allowed Chen and her team to move funds held in the bank accounts, including an account that held American customers’ funds. Employees at Binance.US had to ask Chen’s team to process payments, even to cover the firm’s payroll, company messages show.
Despite both firms maintaining that they have always operated independently, the new findings offer further detail into how Binance exercised tight control over Binance.US’s finances. The previously unreported bank records and messages show that Binance’s management over the U.S. business’s finances extended across its bank accounts at Silvergate and detail how this secret access was granted.
Due to these findings, Binance’s U.S. operations are facing closer attention in Washington. By secretly retaining control over Binance.US’s finances, Zhao ensured he could direct the company’s expansion in the American crypto market while keeping it apart from his global exchange, which was under scrutiny from U.S. regulators.
The U.S. Commodity Futures Trading Commission charged Binance and Zhao with willful evasion of commodities laws in March 2022. They have denied that Binance ever operated its bank accounts. However, a spokesperson recently stated that since late 2021, no one other than Binance.US officials had had control or access to Binance.US accounts.
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