NewsletterBreaking: Binance Exec Tightly Controlled Exchange’s US Arm’s Finances: Reuters
A senior Binance executive secretly operated five bank accounts belonging to the exchange’s independent U.S. affiliate- Binance.US. One of the bank accounts even held American customers’ funds, bank records show, Reuters reported.
Now defunct Silvergate bank allowed Guangying Chen, a close associate of Changpeng Zhao, to control the accounts between 2019 and 2020, according to records from those years.
Binance and its US affiliate both are under investigation in the US for a slew of alleged crimes, including facilitating money laundering and tax offenses.
Binance claims its US arm is completely independent
Binance has repeatedly claimed that its US arm operates independently from Binance and only Binance.US employees have access to Binance.US bank accounts. However, messages reviewed by Reuters reveal that Binance.US employees had to ask Chen’s team to process payments, even the payroll of the employees.
The report further reveals that Chen signed agreements with Silvergate to act as the “Primary Admin User” for the five bank accounts belonging to the US arm, including an account for corporate clients that later sent funds to Merit Peak, a trading firm controlled by Zhao that reportedly commingled its customers’ funds with its corporate revenue.
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. However, the head of legal department of the crypto exchange’s US arm, Krishna Juvvadi, denied such claims and said that they have exclusive control over the exchange since its inception in 2019.
Crypto exchange giant continues to dismiss all claims
The world’s largest crypto exchange by trading volume seems to be in all sorts of legal troubles in the US. The exchange is being investigated by the SEC, IRS and the Department of Justice. However, the exchange has continuously denied any wrongdoing and has dismissed Reuters’ investigation as just FUD against the company.
Read More: Binance Looking for the Next Heir to CZ Amid Regulatory Woes
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