Binance Refutes Allegations of Commingling Billions in Customer Funds

According to a recent Reuters article, three unnamed sources claim that Binance, the world’s largest cryptocurrency exchange, mingled billions of dollars in customer assets between 2020 and 2021. Reuters claims to have questioned these unnamed sources, with one man having intimate knowledge of the Binance group’s financial activity. According to this source, Binance used the now-defunct Silvergate Bank on a nearly daily basis to combine billions of dollars.

It should be noted that this is not the first time that Reuters has published negative reports on Binance. The news agency has previously accused the corporation of money laundering and participating in dubious money transactions. Binance has continuously and aggressively denied these charges, and the company’s Chief Communications Officer, Patrick Hillman, turned to Twitter to declare the specifics in the new story to be incorrect.

“We’ve been very public about where the company had regulatory shortcomings in the past,” he wrote, “there’s no reason for a respected news outlet like Reuters to continue making stuff up.”

The news organization admitted that it could not independently verify the particular amounts or frequency of the transactions listed in the report. Furthermore, there was no proof that Binance had lost any of the cash that were purportedly mingled together.

The study focuses on Binance USD (BUSD), a Binance-affiliated stablecoin at the center of the debate. According to the claims, consumers’ accounts were credited with BUSD as if they had deposited US dollars while, in fact, they were putting BUSD.

It is worth noting that BUSD was formerly issued and supported by Paxos, a New York-based business. The issuing of BUSD, however, has suspended when the SEC issued a Wells notice to Paxos, signaling its intention to pursue legal action against them for allegedly violating investor protection rules. According to CoinMarketCap, BUSD currently has a market capitalization of $5 billion, a considerable reduction from its prior value of $16 billion when Paxos announced the suspension of minting the stablecoin.

According to the current report, three former US regulators highlighted worries about the potential hazards faced by Binance customers. According to these regulators, the fundamental issue is a lack of openness regarding the actual location of customer cash, which jeopardizes their capital and assets. One of them referenced is John Reed Stark, a former SEC enforcement team chief who argued that Binance consumers should not have to rely on the expertise of forensic accountants to locate their money.