• Binance top executive, Guangying Chen, reportedly controlled five bank accounts of its independent U.S. subsidiary between 2019 and 2020.
• During this period, Binance.US staff sought the Chen team’s approval to process payments and cover its payroll.
• Binance denied reports that it commingled user funds with corporate funds in 2020 and 2021.
Binance Top Executive Controlled US Subsidiary’s Bank Accounts
Binance top executive, Guangying Chen, reportedly controlled five bank accounts of its independent U.S. subsidiary between 2019 and 2020, according to a report by Reuters citing bank records. Silvergate Bank authorized Chen as the “Primary Admin User” of the five accounts, including one that held American customers’ funds and an account for corporate clients. During this period, messages obtained by Reuters show that Binance.US staff sought the Chen team’s approval to process payments and cover its payroll expenses.
Binance Denies Commingling Funds
Reuters reported that Binance commingled user funds with corporate funds in 2020 and 2021; however, Binance denied this report calling it a “conspiracy theory” in response to the article published by the news outlet.
Contradictory Statements From Binance US
The new report contradicts earlier claims made by Binance US that it operates independently of parent company Binance. In April, Krishna Juvvadi head of legal at said exchange told Reuters that staff of the exchange’s operator, BAM Trading had exclusive control over its platform’s bank account since 2019; however with new revelations coming forth from Reuters a spokesperson from said exchange said they are “committed to operating in full compliance with all applicable laws and regulations“ which includes separating customer deposits from business operations.“
Background Of The Story
The story began when Securities Exchange Commission (SEC) filed a lawsuit against both CZ (Changpeng Zhao) founder of binance who also happens be CEO as well as binance itself for illegal activities such as securities law violations and selling digital asset securities without registering them or obtaining an exemption from registration requirements under federal law . This led liquidations surpassing $200M within an hour after SEC announced their lawsuit against binance thus leading us to where we are today .
It is still unclear if there has been any misconduct on behalf of binance but it does raise some concern regarding ethics practices especially considering their allegedly commingling user funds with corporate funds in both 2020 and 2021 . It remains to be seen what will happen next but hopefully no further violations have occurred or will occur so that trust can remain intact between exchanges , users , regulators ,and other stakeholders involved .