Binance has reportedly gotten access to the Binance.US bank account, moving a significant sum to a trading company managed by the Binance CEO, Changpeng Zhao. The transfer was revealed by the banking records and company’s messages. Binance.US account was registered under the U.S exchange’s operating company, BAM Trading, the records revealed.
According to quarterly records reviewed by Reuters, it was reported that within the Q1 of 2021, $400 million was transferred from Binance.US to the trading firm. The transaction flowed from the account Binance.US has with Silvergate Bank to Merit Peak Ltd, the trading firm. According to company messages, the transfers to Merit Peak Ltd had started ending in 2020.
It’s unclear the reason for the transfer and if the funds are that of Binance.US or its customers.
The bank records as well showed that Prime Trust, a Nevada-based custodian firm transferred $650 million to Binance.US. According to the exchange’s public terms of use at the time, Prime Trust LLC and Silvergate held Binance.US customers’ dollar deposits.
Kimberly Soward, a Binance.US spokesperson referred to the records on which the Reuters reports were based as “outdated information” and said Merit Peak is not trading or providing any form of service to the Binance.US platform. Also, the Binance.US account can only be accessed by the firm’s employees. A Silvergate spokesman specifically said “the bank does not comment on individual customers.”
According to Reuters, the transfers weren’t within the knowledge of Binance.US’s executives. The CEO of Binance.US at the time in writing to a Binance finance executive questioned the transfers and expressed it is not within her knowledge.
Without giving reasons for the transfer, the Binance finance personnel Coley wrote and only said “Merit Peak was a vendor that facilitated trading on Binance.US and also provided loans and capital injections to the American exchange.” Coley left Binance.US in 2021.
An insider disclosed that an unknown amount of the money was sent to the Key Vision Development firm into their Silvergate account. It was revealed that Key Vision is a Seychelles-incorporated firm with CZ as the director; this was revealed in a 2021 corporate filing by another Binance unit.
By implication, Binance global, not licensed to operate in the U.S. interfered with Binance.US which is believed to have an independent operation based on the report. The Department of Justice and the Securities and Exchange Commission are of the opinion that it is a potential breach of financial rules and is set to launch an investigation.
The Wall Street Journal reported that Binance.US’s Chief Financial Officer, Jasmine Lee, said Binance.US and Binance.com only share a name and licensing technology agreement and there is no transfer of funds.
Bank records and messages point that there is a relationship between the entities involved in the transfer which could be against the regulatory standards, secret, and the business agreement. However, the extent has remained uncertain because of unanswered questions.
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