- Reuters alleged that in 2020 and 2021, Binance mixed client funds with corporate funds
- However, the report does not provide evidence for the main claim and for customers losing money as a result of Binance’s actions
Binance – the world’s largest crypto exchange – is once again in the spotlight with Reuters alleging that the platform mixed client funds and company revenue. The report claimed that the incident took place in 2020 and 2021 and that the switching of the funds violated United States financial rules.
Read Binance Coins [BNB] Price Forecast 2023-24
Allegations against Binance
In addition, the report claimed that the blended funds ran into billions of dollars. And it happened almost every day with accounts associated with the now-collapsed Silvergate Bank. However, Reuters stated that it could find no evidence for these statements. The report continues mention that the agency “reviewed a bank statement” dated February 10, 2021, which showed that the exchange “mixed $20 million from a business account with $15 million from an account that received money from customers.”
A Binance spokesperson spoke to Reuters about the matter, claiming that the exchange was not mixing funds. In fact, the funds have always been corporate funds. The spokesperson further stated that the money sent to the account was for buying BUSD, Binance stablecoin issued by Paxos.
Reuters based its lead report on Binance calling its clients’ dollar transfers “deposits.” This would then be “credited” to their accounts in BUSD. These dollar transfers can be withdrawn by customers, which a former regulator says means protection of funds, the report said. Reuters also claimed that it could not find any evidence that Binance’s clients would lose their funds.
Response to the report
Patrick Hillmann – the chief communications officer at Binance – spoke about the report in a Twitter post. Hillmann stated that Reuters had to state that no evidence was found that customers lost money because the report was “so weak”. He called this a “transparent attempt to shield himself from a libel suit”. The communications chief also stated that the crypto exchange was outspoken about its regulatory shortcomings, giving Reuters no reason to “make things up”.
He on said,
“Also, the xenophobia behind consistently mentioning @cz_binance’s ethnicity without noting that he’s been Canadian since he was 12 is about as subtle as a hammer wrapped in a pillowcase.”
