Binance Transferred $400M to Merit Peak?

Binance Transferred $400M to Merit Peak?

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Jonathan
Jonathan

An editor at Coincrop


17 Feb 2023 | 5 min read
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B

inance has transferred a noteworthy $400 million from its claimed autonomous American partner to an investing company that is overseen by the firm's Chairman, Changpeng Zhao.

Over the first three months of 2021, records reveal that an astounding $400 million was transmitted from Binance.US' account at California-based Silvergate Bank to Merit Peak - a trading firm associated with CZ - as discovered by Reuters in their review.

According to reports, the Binance.US account is registered under a name of "BAM Trading." Moreover, records reflect those transfers made to Merit Peak began in late 2020.

Worth noting, the US Securities and Exchange Commission commenced an investigation in February 2022 to explore any links between Binance.US and Sigma Chain AG & Merit Peak trading firms. This probe was conducted with the belief that a relationship existed between these entities.

A representative from Binance.US recently declared that the report had used "outdated information" and that Merit Peak was “neither trading nor providing any kind of services on the Binance.US platform.” She claimed that "only Binance.US employees have access" to the bank accounts of the U.S. company.

According to Reuters, documents reveal that Binance.US's directors were alarmed by the outgoing funds because they had no knowledge of it beforehand.

Catherine Coley, the then-CEO of Binance.US roused suspicions when she implored a finance executive for an explanation about some unexpected transfers in late 2020. Her message was direct: "No one mentioned them." 

"The money transfers suggest that the global Binance exchange, which is not licensed to operate in the United States, controlled the finances of Binance.US, despite maintaining that the American entity is entirely independent and operates as its "US partner." 

Binance has recently come under fire as US regulators have issued subpoenas to hedge funds and market-making firms dealing with the exchange. They are seeking records of any communications between these entities and Binance.

As part of a thorough inquiry into money laundering violations by the world's biggest crypto exchange, subpoenas have been issued. Bloomberg initially unveiled this scenario in June last year.

According to the report, the SEC is also analyzing whether Binance's launch of its BNB token in 2017 was a security offering that wasn't registered.

The New York Department of Financial Services is presently examining Paxos due to its Binance-branded stablecoin, BUSD. In addition, the SEC has even gone so far as to issue a warning against Paxos for their issuance of these tokens since it could be classified as an unregistered security. If they continue with this plan then they put themselves at great risk of legal repercussions from the agency.

Binance recently shed light on the importance of trust in crypto markets through a blog post titled “Building Trust in the Crypto Ecosystem,” emphasizing that customer assets must be handled responsibly and used only as customers have given permission.


Jonathan

Jonathan

An editor at Coincrop
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Jonathan is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely sailing.


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