Largest Crypto Exchange Binance Allegedly Commingled Customer Funds & Company Revenue
Binance, the world’s largest crypto exchange and many times larger than FTX before its collapse, allegedly mixed customer funds with company revenue, violating U.S. financial regulations, according to sources who spoke to Reuters.
Commingling occurred frequently at Silvergate Bank, with $20 million from a corporate account mixed with $15 million from a customer account. Former regulators warned that this put client assets at risk, but Binance denied the allegations.
Binance allowed U.S. customers to trade on its platform despite claiming restrictions, as revealed by a complaint from the CFTC.
Binance responded by stating it blocks U.S. users and is facing civil charges for evading U.S. laws. The exchange is also under investigation by the Justice Department for money laundering and sanctions violations.
Binance relied on Silvergate Bank for financial operations, with Binance Holdings receiving revenues and customer dollars flowing into an account controlled by the CEO.
Binance converted money into BUSD tokens to potentially evade taxes and account freezes.
Concerns were raised about compliance due to Binance’s reliance on Silvergate Bank. Samuel Lim, the former chief compliance officer, was charged for aiding Binance in violating U.S. laws. Guangying Chen managed Binance’s finances, including various bank accounts and transfers.
The revelations about Binance’s financial operations come amid regulatory scrutiny and legal challenges.
The CFTC has charged Binance, and the exchange is under investigation by the Justice Department. Binance’s banking relationships have changed, with the closure of Silvergate Bank and an unknown future banking partner.
Personally, I’m a big investor and believer in crypto.
As with anyone, my company lost a LOT of money when FTX collapsed. The industry is still recovering from the its wounds.
If Binance is anywhere near the same level of trouble as FTX (which I HIGHLY HIGHLY doubt), then we are fkd as an industry for years to come.
Are you a believer in Web 3 or are you turned off by all the scams and the collapse in prices?
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