Money Trail of Binance Shows $70 Billion Moved Through Signature and Silvergate Banks

As the Binance-SEC lawsuit gains more limelight, more details have come to the surface. As per the latest report from Bloomberg, crypto exchange Binance and its affiliate firms shuttled $70 billion through its accounts at the now-bankrupt Silvergate Bank and Signature Bank.

Both these banks filed for bankruptcy earlier this year amid a banking crisis that rocked Wall Street. As per the fresh filing on Wednesday, June 7, there were “large amounts of money” flowing in and out of the Binance account at these banks, within days.

The Silvergate Bank had facilitated a total of $50 billion across Binance-related parties. On the other hand, Signature Bank handled over $19 billion as per Wednesday’s filing. The filing also states that some funds moved out to foreign entities citing the review of financial records such as bank statements, canceled checks, deposits, and other wire transfers. Note that the total $70 billion flows happened from 2019, until this year before the bankruptcy.

The SEC’s case against Binance claims that it mishandled client funds, but didn’t reveal where the money came from and how it was used. Wednesday’s filing was made to support the motion to freeze assets of Binance.US, but it did not bring any new charges.

A Binance spokesperson said that the transfers mentioned in the document were unrelated to client funds and were part of regular business operations.

Binance’s Partnership With Silvergate Bank

As per the report, Binance.US and its affiliates participated in Silvergate’s SEN network and Signature’s Signet platform. This allowed the exchange to transfer funds seamlessly and instantaneously 24×7. The filing noted:

“At times the amounts being credited and debited during a single month amounts to movement of more than a billion dollars. For example, in July 2021, one Signature Bank Binance Holdings account shows a starting balance of $468 million, deposits of $1 billion, withdrawals of $1.3 billion, and an ending balance of $179 million.”

The filing further stressed how Binance chief Changpeng Zhao was the sole beneficiary of several foreign companies having accounts with Signature Bank. This includes companies domiciled in the UAE, Canada, Seychelles, Lithuania, Singapore, and Kazakhstan. The filing adds that some of the money eventually ended up in Zhao’s personal account.