Binance CEO CZ Secretly Accessed $400 Million User Funds: Reuters Report

Binance US Funds: In what could be yet another setback for crypto exchange Binance and its CEO ‘CZ’, latest reports suggest CZ secretly had access to $400 million worth funds supposedly believed to belong to Binance US users. This could prove to be fatal for Binance if proven to be true as the US Securities and Exchange Commission (SEC) is already tightening rules around user asset custodian services. The allegations of bank transfers from accounts belonging to Binance US follows the SEC’s restrictions of the BUSD stablecoin recently.

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Binance Moved $400 Million To Other Firm?

According to latest reports, Binance executives had secret access to a bank account belonging to Binance US, the exchange’s independent U.S. arm. The report said Binance had transferred the said amounts to a trading firm managed by CZ himself. The Reuters report cited having access to banking records and company messages that revealed these details.

Further to this, the transfers were initiated in late 2020 and over $400 million were said to have been moved to a trading firm, Merit Peak Ltd, which is managed by CZ. The transfers were made from a Silvergate Bank account belonging to the company than owns Binance US, in the first quarter of 2021. However, it is not known if the funds belonged to the Binance US customers or not. Also, since Binance also made it public that its user deposits are stored at Silvergate Bank, the exact reason for the transfer is yet to be known.

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A new rule proposed by the SEC would bring under its purview the crypto exchanges, including them in the list of businesses that custody user assets. The rule could tighten regulatory requirements and stricter guidelines for permissions, effectively make it tougher for crypto businesses to survive in the country.