{"id":13194,"date":"2023-05-24T13:08:53","date_gmt":"2023-05-24T17:08:53","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/binance-accused-of-mixing-company-revenue-with-customer-money-in-u-s\/"},"modified":"2023-05-24T13:08:54","modified_gmt":"2023-05-24T17:08:54","slug":"binance-accused-of-mixing-company-revenue-with-customer-money-in-u-s","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=13194","title":{"rendered":"Binance Accused of Mixing Company Revenue with Customer Money In U.S"},"content":{"rendered":"
\n

The world\u2019s largest crypto exchange, Binance, has mixed company revenues with customer funds in the US, according to a Reuters report.<\/p>\n

The comingling of customer funds and company revenues happened \u201calmost daily\u201d in bank accounts the exchange had at the now-bankrupt crypto-friendly bank Silvergate, the report said, citing \u201ca person with direct knowledge of Binance\u2019s group finances.\u201d<\/p>\n

The mixing of funds at Binance reportedly happened in 2020 and 2021, and was in violation of US laws that require customer funds to be kept separate, three sources told Reuters.<\/p>\n

The alleged practice was at least partially verified by a bank statement from February 10, 2021 reviewed by Reuters that showed Binance mixed $20 million from a company account with $15 million it had received from customers.<\/p>\n

Lack of internal control<\/h2>\n

Meanwhile, former regulators who commented in the article said the mixing of funds indicate a lack of internal controls on Binance\u2019s part, and noted that this puts customer funds at risk.<\/p>\n

Binance customers shouldn\u2019t \u201cneed a forensic accountant to find where their money is,\u201d John Reed Stark, a former chief of the SEC\u2019s Office of Internet Enforcement, was quoted as saying.<\/p>\n

The new allegations against Binance comes after the exchange earlier this year was sued by the US Commodity Futures Trading Commission (CFTC) for allowing US traders to trade derivatives on Binance\u2019s international exchange, which officially does not accept US clients.<\/p>\n

Binance denies wrongdoing<\/h2>\n

In a statement to Reuters, Binance denied ever mixing of customer and corporate funds, saying the accounts mentioned were used to buy crypto on behalf of customers.<\/p>\n

\u201cThese accounts were not used to accept user deposits; they were used to facilitate user purchases\u201d of crypto, Binance spokesperson Brad Jaffe told Reuters.<\/p>\n

\u201cThere was no commingling at any time because these are 100% corporate funds,\u201d the spokesperson added.<\/p>\n

Additionally, the company on Tuesday also pushed back via Twitter, where Binance Chief Communications Officer Patrick Hillmann called the story \u201cweak.\u201d<\/p>\n

\u201cThis story is so weak that they had to put up front, \u2018Reuters found no evidence that Binance client monies were lost or taken\u2019 in a transparent attempt to protect themselves from a libel suit,\u201d Hillmann said in a Twitter thread.<\/p>\n

<\/oembed><\/figure>\n<\/p><\/div>\n