Reuters claims that Binance hacked into the bank account of its US subsidiary Binance.US and transferred over $400 million to a trading firm run by CEO Changpeng Zhao. Here are the latest allegations against the largest bitcoin exchange by daily trading volume.
Where Did Binance Send The Money?
Serious allegations are being made against Binance, the world’s largest cryptocurrency exchange. The exchange allegedly had secret access to a bank account. According to Reuters, the transactions took place in the first three months of 2021 and funds were transferred from the Binance.US account at Silvergate Bank to trading company Merit Peak Ltd. The investigation alleges that Binance.US transferred millions of dollars from an account at Silvergate Bank to a trading company called Merit Peak Ltd. under the alias BAM Trading.
According to the article, the transfers began in late 2020, and the investigation was unable to determine whether the funds transferred belonged to US customers or for what reasons. According to Reuters, officials at the US company were concerned because they were unaware of the changes. According to the investigation, Binance.US transferred approximately $404 million to the company.
Is there a Link Between BinanceUS and Binance’s Financial Situation?
Binance’s CEO, Changpeng Zhao, sits on the board of Merit Peak. As of 2019, Binance and Binance.US are expected to operate independently. Therefore, the above transactions suggest that Zhao may have an improper financial relationship with Binance.US. According to Reuters, the transactions suggest that Binance controls the funds of Binance.US. It has also been rumored that Merit Peak was a seller on Binance.US. According to officials, the lack of public information on the matter created a conflict of interest.
However, Reuters was unable to clarify the reason for the transactions or whether the money transferred belonged to the exchange’s customers. The transfers took place in late 2020 and early 2021. The former CEO of Binance.US, Catherine Coley, unexpectedly left the company at the time and disappeared from social media. Reuters reported that Coley had been monitoring suspicious transactions and questioning other Binance.US employees about them before leaving the company.
Reuters obtained the information from Binance.US’s private bank records and correspondence. Binance.US declined to comment on the transactions, but told Reuters it had accessed “outdated information”. Binance.US does not use Merit Peak’s trading services, according to Reuters. Reuters reported that Merit Peak ceased operations on an unknown date. The relationship between Binance.US and Merit Peak has been under scrutiny since February 2022, when it was revealed that the US Securities and Exchange Commission was investigating many of the exchange’s partners. According to the report, the SEC issued its first subpoena to Binance.US in 2020.
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